London’s young buyers have proved a stronger force in the capital’s property market than oligarchs and overseas royalty, propelling newly fashionable locations such as Walthamstow, Peckham and Clapton above prime Mayfair, Hampstead, and Fulham in the price growth stakes.
Data from house price monitor Hometrack, published today, reveals that south and east London hipster hotspots have comfortably outpaced prime central London since the depths of the recession in 2009.
Walthamstow and Clapton have seen the strongest surges, with average prices up just over 133 per cent, with Peckham in hot pursuit with price growth of almost 130 per cent. Leyton, which has enjoyed a ripple of buyers priced out of Hackney, has seen prices rise more than 128 per cent in the last eight years.
Meanwhile, Mayfair has managed price growth of a far more modest 88 per cent, as spectacular growth between 2010 and 2015 has been followed by two years of price stagnations and modest falls as the overseas buyers who had been underpinning growth disappeared.
In the same period, Fulham prices rose 87.5 per cent, and Hampstead, the ultimate leafy north London village, has had price growth of just under 87 per cent.
In Peckham, Becky Munday, managing director of Munday’s estate agents, attributes the area’s boom to the opening of the South London Line extension in 2012, which gave the area a fast link to Canary Wharf. Meanwhile, Peckham was more organically developing a neat line in new bars and clubs, while projects such as the bid to reopen Peckham Lido and create the Peckham Coal Line, an elevated urban park between Queen’s Road and Rye Lane have only added to the buzz.
This means that today, Munday estimates, a two-bedroom period conversion near Peckham Rye would cost between £600,000 and £625,000, while a four-bedroom terrace would cost a “crazy” £1.2million.
Most of her buyers are in their early thirties, funded by the bank of mum and dad, or local movers using the equity they earned from buying a flat in the area several years ago to upgrade to a house.
Despite the stellar performance of Peckham et al since the recession, Hometrack believes price growth across the capital is already slowing in a nervous post-Brexit world. It forecasts “low single digit growth by the end of 2017”, with price growth likely to be strongest in more affordable locations and lowest in the most expensive areas.
“House price growth is now slowing rapidly across London,” said Richard Donnell, insight director at Hometrack. “The annual rate of growth is currently eight per cent year-on-year in the lowest value markets, while prices are falling by five per cent year on year in the most expensive markets.