House prices in the south-western boroughs of Merton and Sutton rose at the fastest pace in London in the year to July as buyers looked for more space during the coronavirus pandemic, according to exclusive analysis by property website Zoopla for City A.M.
Prices barely budged in the borough of Hillingdon on the western edge of the capital and in Enfield in north London, however, reflecting the uneven effect of Covid-19 on the city’s property market.
Zoopla’s new analysis of its latest house price index showed that prices jumped 3.2 per cent in Merton the year to July and 3.1 per cent in Sutton. That was well above the UK average of 2.5 per cent.
In joint third place were Newham in east London, Haringey in north east, and Wandsworth in south west, where prices climbed 2.7 per cent.
Grainne Gilmore, head of research at Zoopla, told City A.M.: “We have seen rising demand for three-bed homes and larger houses in London. And the availability of this type of stock, across a wider range of price bands, is reflected in these locations.”
Stamp duty holiday boosts London house prices
UK house prices have soared to record highs in the wake of the coronavirus lockdowns, even as the country’s economy suffers its worst year in memory.
Pent-up demand – which accumulated while the property market was frozen in April and May – and the government’s stamp duty holiday have massively boosted the market.
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Zoopla said the stamp duty holiday, which raised the payment threshold to £500,000 until March, had lifted London sales by 27 per cent. Yet its analysis showed that the effect on the capital’s housing market has been uneven.
Hillingdon and Enfield were the least desirable for new buyers over the last year. Prices rose just 0.3 per cent and 0.4 per cent respectively.
Gilmore said: “While we are seeing demand outstrip supply in many areas, putting upward pressure on prices, this is happening to different extents in different localities.”
Harrow saw the third smallest rise with 0.9 per cent growth. Ealing was next with one per cent growth and Bromley had the fifth-smallest increase, of 1.1 per cent.
“We are also seeing the effects of a ‘one-off’ shift after lockdown, with demand from households who have reassessed how and where they want to live,” Gilmore added.
Analysts and estate agents have reported that buyers are looking for gardens and properties near parks, as well as more space.
Kensington and Chelsea the priciest borough
London house prices on average grew by 2.4 per cent in the year to July. It outpaced other areas in the south of England such as the south east, which saw 1.2 per cent growth.
However, regions in the north of England achieved the strongest growth. Yorkshire and the Humber and the north west both saw prices increase 3.2 per cent.
The price discrepancy between London’s different areas remained huge in July, Zoopla’s data showed.
In Kensington and Chelsea, where prices grew two per cent in the year to July, the average house cost £1,170,700.
Westminster was the second-most expensive, with the average property worth £955,000. House prices grew 1.8 per cent over the year in the borough. The City of London, where prices climbed 2.2 per cent, was third with an average price of £786,400.
Barking and Dagenham was the cheapest borough, with the average house costing £293,000. Bexley was second cheapest, at £344,700, while Havering came in third, at £366,800.
What happened to house prices in your London borough?
|London borough||Current price||Quarterly change||Annual change to July|
|Barking and Dagenham||£293,038||0.8%||2.5%|
|Kingston upon Thames||£515,166||0.9%||2.3%|
|City of London||£786,376||-0.1%||2.2%|
|Hammersmith and Fulham||£715,214||0.3%||2.1%|
|Kensington and Chelsea||£1,170,662||0.3%||2.0%|
|Richmond upon Thames||£698,055||0.3%||1.8%|
Source: Exclusive Zoopla house price index analysis for City A.M.
By Harry Robertson
Source: City AM