London property prices

publication date: Apr 28, 2021
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

London property prices


London is made up of 32 boroughs, some of which are host to some of the most expensive properties in the world, which reside next to social housing, owned by the state and rented at around a third of the cost on the open market.

London is often included in the overall UK and country statistics, which disguises what’s really happening in the market. As a capital city, it should be compared to other capital cities across the world rather than other areas in the country due to the level of international investment it attracts and the higher rates of renting versus home ownership.


It’s been much talked in the media and property and rental indices that London has struggled more than most areas during the pandemic, and this is shown in the Q4 and latest data on the market.

With most places showing double digit property price rises, London, in the main has been around 3% - although mortgaged properties do appear to have risen more according to Nationwide.

However, London is made up of so many different areas and the table below shows the enormous change in each. Double digit and more growth has been seen in Brent, Merton, Hackney and Waltham Forest, while areas such as Camden have actually seen prices fall year on year.

But for those that have decided to abandon London and head ‘north’ for property price returns since the last recession (2007), it’s worth looking at the price growth that’s been missed. Most regions haven’t seen house prices keep up with inflation, while in areas such as Hackney and Merton, prices have continued to rocket over time, with Waltham Forest topping the charts, seeing property prices nearly double. And even the ‘poorer performing’ areas such as Hammersmith and Fulham which have achieved less than 40% growth over this time, that’s still better than most regions – the North East for example has seen growth of 1% on average over the same period.

Source: UK HPI

What’s happening in different boroughs?

It’s incredible really that ‘average prices’ in London are ever reported! With the lowest average property prices found in Barking and Dagenham at just under £318,000 through to the most expensive in Kensington and Chelsea of just under £1,300,000, four times that amount!

And despite the view that London is seen as ‘unaffordable’ even these borough averages hide that fact that properties can be bought via Shared Ownership, with 59 properties available for under £100,000 according to Rightmove on the 18th April 2021.


Source: UK HPI


Transactions, demand and supply

Despite property prices holding up, in the main, in London, sales volumes during 2020 were down in September 2020, by around -22% versus -12.5% nationally. 


Source: UK HPI


London sales recovering?

 Source: UK HPI

However, latest data suggests that sales volumes started to recover to the end of the year as they have nationally, to the levels seen over the last few years.

And, rarely reported in London, according to Hometrack, London is one of the few places where supply has grown in excess of demand with more flats coming onto the market due to the pandemic.

Hometrack report that it’s flats driving this increase in supply due to:-

  1. More owners looking to trade up from flats to houses motivated by a desire for space and more flexible working patterns.
  2. Investors looking to sell homes in the face of falling rents and expectations of an increase in capital gains tax rates in 2021.

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