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Four London boroughs set for rocketing house prices amid mass-regeneration

House prices in London are set to grow by an average of 12 per cent over the next five years, according to research which suggests London’s property slump might not be as severe as many in the industry had feared.

Among the London boroughs pipped to undergo the fastest growth are Hackney, Camden, Tower Hamlets, and Haringey, according to new research from real estate advisor CBRE.

The report also found that Harrow experienced the strongest house price growth over the last 12 months, rising 14 per cent compared with the London average of two per cent, the figures revealed.

However, over the last five years the area with the strongest growth has been Waltham Forest, which saw an 83 per cent increase in the price of property; almost double the London average.

“The figures in this report suggest that London’s population will grow 12 per cent over the next decade, as people continue to flock to the one of the world’s top cities for education, business and heritage,” said Jennet Siebrits, head of residential research at CBRE UK.

Siebrits added: “We estimate that nearly 65,000 new homes are currently under construction and it is crucial that this rate continues if we are to safeguard the future of London as a thriving home for people from all over the world.”

According to the report, London’s growth has been “encouraged by the mass-regeneration of previously unloved areas of the capital. It’s encouraging to see much more thought being given to the role that safe roads, open spaces and green areas play in people’s lives when regeneration projects are planned”.

The news comes despite a swathe of recent forecasts predicting London could suffer a sustained decline in house prices up until 2020.

A YouGov survey last month suggested public expectations for house prices over the next year have hit their lowest level in 12 months, while a recent Reuters poll of 30 housing market specialists estimated that house prices in London are set to tumble as much as 1.6 per cent by the end of 2018 and a further 0.1 per cent next year.

Caution has lingered in the run up to Britain’s discussions with Brussels over leaving the EU, with activity slowing down in many parts of London as homeowners wait to see what type of deal is achieved from the Brexit negotiations.

Yesterday’s Office for National Statistics data showed that London house prices plunged to their lowest rate of growth in nearly a decade in July, falling 0.7 per cent over the 12-month period.

Source: City A.M.

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Six London boroughs rank in 10 worst areas for rental growth in England

London boroughs were among the worst performing areas for rental growth last year, with Kensington and Chelsea taking the wooden spoon.

According to research from buy-to-let mortgage lender Landbay, six of the bottom ten ‘rental fallers’ over the past year were all in London, including Kensington and Chelsea , Kingston upon Thames, Hammersmith and Fulham, Tower Hamlets, Barnet and Harrow.

In total half of London’s boroughs (17 out of 33) have seen rents fall year on year. Only Bexley, Havering and the City of London saw rents rise by more than 1 per cent.

Bottom 10 areas for rental growth in England

Rank Region Geography YoY change (per cent) Average rent (£)
1 London Kensington and Chelsea -1.40 3,024
2 North East Hartlepool -1.19 404
3 East England Luton -1.15 768
4 South East Windsor and Maidenhead -1.07 1,252
5 London Kingston upon Thames -0.98 1,272
6 London Hammersmith and Fulham -0.81 1,884
7 London Tower Hamlets -0.79 1,725
8 South East Wokingham -0.78 1,031
9 London Barnet -0.69 1,481
10 London Harrow -0.68 1,317

The study showed that the average rent for a property in England grew by 0.64 per cent in the year to April, with London’s falling rents weighing down otherwise resilient growth.

Hotspots for rental growth over the last year include Leicester (3.02 per cent), Nottingham (2.96 per cent) and Northamptonshire (2.44 per cent), with eight of the top ten ‘rental risers’ situated in either the east midlands or east of England.

Top 10 areas for rental growth in England

Rank Region Geography YoY change (per cent) Average rent (£)
1 East Midlands Leicester 3.02 647
2 East Midlands Nottingham 2.96 663
3 East Midlands Northamptonshire 2.44 732
4 South West Bath and North East Somerset 2.35 976
5 East England Peterborough 2.24 639
6 East England Cambridgeshire 2.21 948
7 East England Suffolk 2.15 734
8 East England Norfolk 2.06 709
9 East England Southend on Sea 2.06 762
10 South West Bournemouth 2.04 821

John Goodall, CEO and co-founder of Landbay said: “Falling rents in some parts of the country, especially expensive prime London locations, distort the picture for the rest of England where rents are continuing to grow at a steady pace.

“Partnered with the fact that rental demand shows no signs of giving up, prices will continue to rise over the coming years unless the government takes action. Without a radical house building plan for both first-time buyers and purpose-built rental properties, there is no way supply will ever be able to catch up with demand.”

The average rent paid for a property in England now stands at £1,232, or £768 if you exclude London, according to Landbay. The lowest average rent is found in the north east (£552), where rents have shown very modest long-term growth over the past five years.

Source: City A.M.