We have been analysing London property prices by borough since July 2013 and since that time we have seen some incredible changes to local markets.
The average price in 2013: £358,799
The average price in 2015: £506,724
That’s an increase of 41%, scary stuff in just two and half years.
However, the London average is now so ridiculously skewed by prices in prime central London that it’s worth really understanding what’s happening in boroughs which, in my view, ‘real’ people can afford or at least contemplate buying in and stripping out the ‘prime central London figures’.
For example, the key boroughs that I think are now so ridiculously out of reach for most people are any borough that has an average price in excess of £750,000 isn’t really worth concerning ourselves with as the only people that can purchase them are the super rich or those who have been internationally successful, these areas include:-
Without these boroughs the London average price performance starts to look a lot different.
For example, the stats say the London average is now over £500,000, but when you look at individual boroughs, the reality is that 19 out of the 32 London boroughs ie 60% sell for less than this amount.
This means that despite the ‘doom and gloom’ around London house prices there are still areas that people can buy in, they might not be the favourite places to go and require a commute, but some areas in London are still ‘affordable’.
Barking and Dagenham is the cheapest with averages of: £302,625, the commute cost would be around £212 a month (2016 prices).
When looking at property portals, such as Rightmove, a quick search of Barking shows that there are currently 28 properties available for less than £200,000.
A £200,000 property would require:-
But bear in mind there are financial restrictions of how much can be borrowed: 4.5 salary, so to purchase this property you would need an individual or joint salary of £42,000.
The good news is this would buy you a two bed flat and be in Holborn within just 30 minutes.
If you went a bit further out to Dagenham, there are currently 22 properties to choose from and you would increase your journey time to 40 minutes but could buy a one bedroom flat for just £150,000.
What else does the data tell us?
It’s also worth looking at the performance of other boroughs versus the ‘runaway’ international ones.
Although areas such as Hillingdon, Barking & Dagenham, Newham, Enfield and Bexley are all doing well year on year with double digit growth ranging from 11% to 14%, overtime, the performance hasn’t been this aggressive at all.
At the height of the market for example, Barking and Dagenham reaching an average price of £254,561, then prices fell to around £197,000 in 2009 and are now £302,625. This means that since 2008, property prices in the area, on average, have grown by 2.47% each year since 2008. Slightly ahead of wages, but a 19% increase overall, versus the no-where near the 41% increase that the ‘Greater London average’ is showing.
What’s happening in your borough?
So if you are keen to buy in London and want to look at where you can still afford to purchase, it is worth checking out boroughs which haven’t grown at anything like the rate the ‘prime London markets’ have.
To find out what’s happening in your borough and to checkout prices in the more affordable areas of London, download my London borough analysis.
Quick Snapshot of London Borough property price performance
Top 5 performing areas year on year (2015 vs 2014)
Top 5 areas which have grown the most since the credit crunch (2015 vs 2007/8)
Top 5 areas which have the lowest month on month growth (Nov 15 vs Oct 15)
Top 5 areas since the market low (2015 vs 2009)