London’s rate of house price growth has significantly out-paced that in the wider country since 2009: While prices in the capital have jumped by 59% (from £362,641 in 2009 to £578,381 in 2016), the average value in England & Wales has risen by 31%.
The average property price in London has risen by 59% since 2009, according to some research by Lloyds Bank. But while prime boroughs led the recovery after the global financial crisis, it’s outer boroughs that have seen the fastest house price inflation in the last two years.
London’s Prime boroughs – City of London, Westminster and Kensington & Chelsea – led the road to recovery between 2009 and 2014 with an 80% increase in average house prices. Homes in the City of London nearly doubled in that period from £455,020 to £894,046 (97%), followed by Westminster (86%) and Kensington & Chelsea (74%). In the last two years, however, house prices in these locations have seen little growth with prices in City of London and Westminster rising by only 2%.
In the last two years, the largest growth areas are from London’s outer boroughs with an average growth of 19%, compared to 4% for prime boroughs1 and 12% for inner boroughs. Nine out of the top 10 growth areas over this same period are within Outer boroughs with an increase in house prices between 25% and 32%.
The City of London and Waltham Forest have seen the biggest price rises of any borough: 100% (to £908,759) and 97% (to £433,105) respectively. Tower Hamlets has fared the worst of the capital’s boroughs since the financial crisis, with average house prices increasing by 54% between 2009 and 2016. Even though this is below the overall increase for London, it is still a higher rate of growth compared to the rest of England and Wales (31%).
Newham and Barking & Dagenham, the two boroughs most impacted by the downturn, are now the areas which have seen the biggest increase in house prices in the last two years. Helped in part by the regeneration of this area as a result of the London 2012 Olympic Games, Newham has seen average house prices increase from £269,529 in 2014 to £356,638 in 2016, a rise of 32%, with Barking and Dagenham also reporting a rise of 32% to £285,129.
Andy Mason, mortgage director at Lloyds Bank: “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. 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.”
London’s best performing local authority districts, 2009-2016
|Local Authority District||Average Average House Price||House Price 2009 2016||Change £||Change %|
|City of London||455,020||908,759||453,739||100%|
|Kensington and Chelsea||1,046,104||1,857,287||811,183||78%|
|Barking and Dagenham||166,432||285,129||118,697||71%|
|Kingston upon Thames||328,578||552,473||223,895||68%|
|Hammersmith and Fulham||556,678||914,478||357,800||64%|
|Richmond upon Thames||507,773||797,959||290,186||57%|
|England & Wales||213,215||278,750||65,535||31%|
London’s local authority districts recovery, 2009-2014, 2014-2016
|Local Authority District||Average House Price 2009||Average House Price 2014||Average House Price 2016||Change 2009 to 2014 %||Change 2014 to 2016 %|
|Barking and Dagenham||166,432||215,793||285,129||30%||32%|
|Kingston upon Thames||328,578||475,079||552,473||45%||16%|
|Richmond upon Thames||507,773||730,744||797,959||44%||9%|
|Hammersmith and Fulham||556,678||880,119||914,478||58%||4%|
|Kensington and Chelsea||1,046,104||1,822,709||1,857,287||74%||2%|
|City of London||455,020||894,046||908,759||96%||2%|
|England & Wales||213,215||259,979||278,750||22%||7%|
N.B. Lloyds Bank’s London borough definitions:
- Prime: Kensington & Chelsea, City of Westminster and City of London (not officially classed as a borough but included in this analysis).
- Inner: Camden, Hackney, Hammersmith & Fulham, Islington, Lambeth, Lewisham, Southwark, Tower Hamlets and Wandsworth.
- Outer: Barking & Dagenham, Barnet, Bexley, Brent, Bromley, Croydon, Ealing, Enfield, Greenwich, Haringey, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Newham, Redbridge, Richmond upon Thames, Sutton and Waltham Forest.