£530,000: this two-bedroom flat in Lower Clapton Road, near Hackney Downs train station, is located in one of the booming parts of the capital
More than a dozen buyers are chasing every house for sale in London — driving soaring prices.
The average seller in once-grim Hackney, where prices have risen 20 per cent in a year according to the Land Registry, is bombarded with five offers from eager buyers looking to live in one of London’s fastest-changing boroughs.
Meanwhile, only three London districts now have average house prices below the £250,000 stamp duty threshold — Barking and Dagenham, where the average is £234,283, Bexley (£248,383) and Newham (£239,942).
Experts today said these levels of growth are “unsustainable” and warned buyers to expect an immediate slowdown when mortgage rates rise.
According to the Land Registry, London prices have risen almost 14 per cent year on year to an average of £414,356.
Waltham Forest and Hackney both saw price leaps of more than 20 per cent to averages of £305,745 and £528,737 respectively. Around two thirds of London’s boroughs enjoyed double-figure price rises.
Robert McLaughlin, regional sales director for north-west and central London at Kinleigh Folkard & Hayward, says the number of buyers in Hackney, and also in Islington — where prices rose almost 18 per cent to an average £589,081 — is up 46 per cent year on year, which means there are 12.5 buyers chasing every available property.
He puts Hackney’s strength down to increased confidence in the property market in general, the Government’s Help to Buy Scheme which allows buyers to put down just five per cent as a deposit, plus Hackney’s stock of period homes and good transport links.
Other top-performing boroughs include Wandsworth, up by almost 18 per cent to an average £505,797. In Southwark prices rose by almost 17 per cent, to £468,943 while Westminster saw a surge of almost 16 per cent to £890,272. The other strongest performers were Hammersmith and Fulham, up 16 per cent to £685,797, and Lambeth, also up 16 per cent to £441,907.
The slowest rising boroughs are Harrow (up 4.9 per cent to £320,778) and Newham (also up 4.9 per cent).
Hector Castro from Hunters Estate Agents in Hackney says apart from shortage of stock, owners are increasingly worried about leaving London while prices are rising so strongly. “The rapid rise over the last couple of years has meant that those people who sold up for pastures new as little as one year ago, would never be able to get back in,” he says.
Lucian Cook, director of residential research at Savills, says the data shows the property recovery is rippling out across London as buyer confidence grows, and a shortage of supply forces buyers to compete for homes.
“This time last year 18 of the boroughs had annual house price growth of less than five per cent and only three — Kensington & Chelsea, Camden, and Hammersmith & Fulham — had growth of over 10 per cent,” he says. “Now only two — Harrow and Newham, have growth below five per cent and 20 have growth over 10 per cent.”
His long-term view is that the current growth levels will not continue once interest rates rise next year or in 2016. Nicholas Leeming, chairman of Jackson-Stops & Staff, agrees that unfettered growth cannot continue, and sees next year’s election as pivotal. “Not surprisingly, many Londoners are worried about the mansion tax proposal.”