Property prices in London have started to show a recovery since the economic downturn, with prices in some regions doubling during the period.
This has been driven by growth in outer boroughs, according to new research released by Lloyds Bank.
Average property prices in Greater London have risen by 59% from £362,641 in 2009 to £578,381 in 2016. This was in comparison to growth of 31% across England and Wales as a whole during the same timeframe.
In the City of London, prices have doubled since 2009 to £908,759. This was closely followed by the borough of Waltham Forest, which saw a rise of 97% to £433,105.
On the other hand, Tower Hamlets has seen the worst performance in the capital since the financial crisis, with average property prices rising by 54% between 2009-2016.
The capital’s prime boroughs of the City of London, Westminster and Kensington and Chelsea saw an average increase of 80% between 2009-2014. However, there has been only small growth during the last two years.
Prices in the City of London almost doubled between 2009-2014, from £455,020 to £894,046 – a rise of 97%. Values also rose by 86% in Westminster and by 74% in Kensington and Chelsea. Since then, prices have barely shifted, with a rise of just 2% in City of London and Westminster.
Indeed, the largest growth in the last two years has been seen in London’s outer boroughs. These regions have recorded typical growth of 19% over the period, in comparison to just 4% for prime boroughs and 12% for inner boroughs. 9 of the top 10 growth areas during the same two-year period are within outer boroughs.
Outer London boroughs driving property price growth in the capital
Newham and Barking and Dagenham, the two boroughs most impacted by the financial downturn, are now recording substantial growth. The Lloyds report suggests that this is due largely to the regeneration of the regions following the magnificent 2012 Olympic Games.
Average house prices have increased from £269,529 in 2014 to £356,638 in 2016- an increase of 32%. Barking and Dagenham saw an increase of 32%, to £285,129.
Andy Mason, Mortgage Director at Lloyds Bank, said: ‘The financial crisis saw average house prices in London generally remain stable during 2007 and 2009. Following the crisis, the growth in average prices in prime boroughs outpaced other areas in London by nearly double to create its own distinct market.’
‘More recently, our analysis is showing house price growth in outer London boroughs is increasing at a greater pace than inner London boroughs. Average house prices in the most expensive areas are starting to flatten, whereas London’s most affordable areas are showing healthy growth,’ he continued.
Concluding, Mr Mason observed:’ A possible explanation for this is the ongoing legacy from the 2012 Olympic Games and that outer borough areas like Newham will benefit from the Crossrail link to the City due for completion at the end of 2019.’