London's "reverse ripple effect" is in full swing, as property values in outer boroughs are rising faster than in prime central London, says a new report.
The analysis, by estate agent Jackson-Stops & Staff, reveals prices in five of the most expensive prime central London boroughs, including Kensington & Chelsea and Camden, have risen by 110 per cent over the past 10 years, from £451,000 to £947,000, but that only 2.5 per cent of this growth was in the last year.
Conversely, 20 per cent of the price growth in the five cheapest boroughs has happened in the last 12 months, with values rising a total of 68 per cent in the last decade from £203,000 to £344,000 in areas such as Croydon and Barking and Dagenham.
“Buyers and sellers need to take an important message from this, specifically that a long-term view of the property market is essential to decision making processes," says Toby Whittome, Jackson-Stops & Staff’s sales director in London.
"Annual fluctuations in prices caused by macro-economic and political issues, as we are seeing right now, should not obscure the big picture."
Last year, the prime property market was hit by stamp duty tax increases and uncertainty after the Brexit vote, with large swathes of inner London areas experiencing property price falls.
The report highlights Southwark and Lambeth as two central areas bucking this trend and outperforming in both the short and long term.
A boom in luxury high-rise homes along the South Bank has led to this area becoming London's strongest-performing neighbourhood, with the number of sales up an astonishing 114 per cent year on year.
Prices are tipped to continue to rise in the diverse borough that offers something to buyers at each end of the price spectrum, with the cheapest apartment at One Blackfriars currently on the market for £1.5 million and a one-bedroom flat in Peckham listed for £225,000.
Plus, savvy buyers are being lured to the borough because of the new Bakerloo line linking Elephant & Castle and Lewisham to the West End, even though the proposed route is 10 years off.
It's a similar story in south London's Lambeth. Home to both the regeneration hotspot of Vauxhall and comparatively more affordable and up and coming areas Brixton and Streatham, it was one of 2016's top 10 fastest-rising boroughs in terms of house price growth.
It's no surprise that the more affordable areas on the outer reaches of the capital are in higher demand thanks to Londoners being priced out of central locations.
Over the past year, prices have risen fastest in the cheapest borough, Barking and Dagenham, where average house prices are up 17 per cent from £246,955 to £288,873.
The east London regeneration hotspot was recently named as the capital's most profitable buy-to-let location, which suggests first-time buyers are likely to be competing with landlords for starter homes, thereby pushing prices up further.
London's population is steadily rising and housing stocks are still too low across the capital, which is also fuelling house price rises in the suburbs.
Slowing prices are good news for those struggling to get on the housing ladder but bad news for owners as prices can only rise so far before buyers start to be priced out of more so-called "affordable" areas.
"With the negative combination of the rising cost of living eating away at modest pay increases, it is hard to see how property prices can keep rising at a fast pace," says Miles Shipside, Rightmove director.
"If it becomes impossible to buy, sellers will also take a hit on the price of their home due to a drop in demand."