Economic forecaster Ernst & Young predicts that by 2018, the average home in the capital will cost £600,000. Unlike in recent years, the latest price spurt isn’t being driven by prime central London postcodes, but by the “doughnut” of boroughs around them.
LAMBETH WALKS THE TALK
Lambeth was a hotspot where prices rose 15.1 per cent last year while Kensington and Chelsea, London’s costliest borough, only managed 10.4 per cent. Luke Wooster, managing director of Wooster & Stock estate agents, says Brixton, in Lambeth, saw 20 per cent rises, driven by buyers priced out of Clapham.
“The quality of shops — selling oysters and champagne no less —opening in Brixton Market over the last couple of years has really improved,” he adds. “There is just a buzz about the area.”
A three-bedroom terrace would cost between £600,000 and £700,000 says Wooster, while a two-bedroom flat would be £400,000-plus. These stiff prices are having a knock-on effect in the hinterlands of Norwood and Streatham, currently about 30 per cent cheaper, he adds.
Town and country: the city farm at Vauxhall, one side of Kennington Triangle, a new property hotspot
Image: Graham Hussey
KENNINGTON CUTS IT AND WALTHAMSTOW WINS
The Kennington Triangle, between Lambeth North, Vauxhall and Kennington Tube stations, is identified as a new hotspot by estate agent Kinleigh Folkard & Hayward thanks to its central location, good transport links, and proximity to regeneration zones at Nine Elms and Elephant and Castle.
A top-performing east London borough is Waltham Forest, which, with growth of 16.2 per cent, easily outstripped prime Westminster’s 12.3 per cent. Mahmood Faiz, a director of James Williams estate agents, says the traditionally working-class area is developing middle-class enclaves.
These include Walthamstow Village, a conservation area filled with Victorian terraces and cottages and a promising array of independent cafés and shops. Expect to pay £425,000 to £475,000 for a two-bedroom cottage, and up to £600,000-plus for a five-bedroom Victorian terrace.
Family buyers are heading to Bushwood, Leytonstone, attracted by its position — sandwiched between a good mix of shops and train stations, while being on the A12, and with miles of open country to the east. Four-bedroom Victorian terraces sell for a comparatively reasonable £650,000.
The other up and coming address is Lloyd Park, close to the William Morris Gallery, where a two-bedroom purpose-built flat would cost between £325,000 and £350,000.
Eastern promise: William Morris Gallery, in Waltham Forest borough, which beat Westminster for growth in house prices. Image: Alamy
HAMMERSMITH & FULHAM AND HACKNEY ON A HIGH
Other boroughs performing strongly include Hackney, where prices rose 17.2 per cent, and Hammersmith and Fulham, where they went up 15.3 per cent. Haringey, Islington and Southwark all recorded rises of about 12 per cent.
No London borough experienced falls, but Harrow is struggling on a rise of just 2.3 per cent, while Newham managed a lacklustre 3.8 per cent.
Lucian Cook, director of residential research at Savills, points out that half a dozen boroughs failed to match their peak levels of 2007. Barking and Dagenham remains 10 per cent below the peak, while Newham and Bexley respectively recorded nine per cent and 4.7 per cent below their best.
Kensington and Chelsea and Westminster, both 40 per cent above peak levels, are the strongest. Hammersmith and Fulham and Hackney are both more than 30 per cent above their peak, while in Wandsworth, Camden and Islington, prices are between 25 and 30 per cent higher than seven years ago.
“I still think, to be brutal, the more equity-rich boroughs are outperforming and are the strongest,” says Cook. However, he agrees there is “a little bit of a shift out of central London” caused by “a bit more domestic cash coming into the market because of improved confidence in the market.”
Over the next five years he believes affluent but more suburban areas will start to flourish. “I can see areas like Merton, Lewisham, Kingston, Ealing and Barnet perhaps performing most strongly,” he says.