Kate's latest London property price update - October 2016

publication date: Oct 3, 2016
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Kate's latest London property price update

Although London is often reported as ‘one market’, it really isn’t. From our analysis there are thousands of markets, just in Greater London, but we break this down for you into the 32 London boroughs, so click here if you just want to see how your own borough has performed.

Summary of London property price reports

The London property price data shown by Rightmove, LSL and UK HPI illustrates what a vast difference the ‘average’ price is in London, depending on which index you use. The Rightmove figure is a whopping 36% higher than UK HPI. This shows how useless average data is in an area that has prices ranging from a few hundred thousand to tens of millions of pounds!

From a trend perspective, though, the data shows that property prices in the capital are certainly slowing. The 12% increase from UK HPI represents what was happening three-six months ago, whereas the Rightmove and LSL data reflects more what people think of the market in today’s terms – and that’s clearly a slowdown, almost to a full stop.

However, it should be remembered that London has been seeing double-digit rises since around 2012/13, so a slowdown a few years on should really be welcomed by all.

Want to find out what's happening in your borough? Click here

Source: UK HPI

The data on individual boroughs shows that the previously strong growth seen in the wealthy counties has now, albeit in a small way, gone into reverse. The outskirts of London are still seeing the ripple effect of prices rising in the capital’s centre, but it’s likely they will follow the same pattern moving forward and see a slowdown in the next year or so. But the five-year growth figures show that, even though year-on-year performance is good for the likes of Havering, that area has seen one of the poorest rises in prices, while it is interesting that Hammersmith and Fulham has now slowed so much it’s also ended up as one of the poorer performers with Waltham Forest – of all places – doing substantially better!

Want to find out what's happening in your borough? Click here

Price inflation for new builds 50% higher than existing homes
The new UK HPI data shows some really interesting changes in trends for prices. With most cash and mortgaged purchases growing by around 12% year on year, you can see the tremendous impact of new build – an enormous inflation rate 50% higher than existing homes. This is significant because if a borough has a substantial amount of new build, it’s clear that this can artificially increase the property price inflation rate for that area.

From a purchase cost perspective, the competition for second and third homes is clearly high with average prices being £547,424 versus £423,422 for first homes, a gap of 23%. Interestingly though in other areas, first-time buyers are paying up to 40% less than the ‘average price’ showing the initially raw deal that FTBs get buying in the capital versus living in other areas.

Buying for the first time? Read our FTB quick guide

The Rightmove stats show additional information that the vote to Brexit has caused a ‘wobble’ at the top of the market, coupled no doubt with the increases in property taxation. But we will have to wait for a few months to see if the fall in sterling is enough to tempt foreign buyers back into the UK prime market.

Source: Rightmove HPI

Source: UK HPI

Source: Rightmove HPI

It’s not a big surprise that sales are down in London in April and May as this was after an enormous rush to buy in March to beat the stamp duty rises. It’s likely to take sometime for these figures to recover – if they do this year.

From a time-to-sell perspective, though, things are still looking pretty healthy despite a slower market, with properties being sold in just 51 days.

Looking to sell sharpish? Read how to sell your home quickly.

Want more? Download my comprehensive report here.

All our information is brought to you by Kate Faulkner, author of Which? Property books and one of the UK's top property experts.
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