£205,000: for a studio apartment in the recently converted Royal Academy Greenwich
The true cost of getting on to the property ladder across London is revealed today. Exclusive new research shows exactly how much a modest starter home in each of the capital’s boroughs will cost — ranging from a surprisingly affordable £159,340 for those prepared to house hunt in Barking and Dagenham, to well over half a million pounds (and rising) for those who aspire to a first home in prime central London.
The figures, by Savills, show first-rung prices in almost half of the capital’s boroughs are now above the £250,000 stamp duty threshold, meaning buyers will be liable for three per cent tax on their purchase.
The data is based on an analysis of the price of “lower quartile” property sales — that is homes that are in the cheapest 25 per cent of those sold and the kind of properties first time buyers are most likely to aim at.
The areas to look at are those that combine affordability with strong capital growth.
In Haringey, starter homes are priced at an average £250,313, up 16 per cent over the same period. In Lewisham they come in at an average £205,523, up 15 per cent, while in Greenwich they are priced at £206,520, up 14 per cent. Enfield (£207,703, up 13 per cent); Bromley (£224,866, up 12 per cent) and Brent (£246,311, up 12 per cent) also combine price growth and (relatively) low pricing.
James Cooley, senior sales manager at Kinleigh Folkard & Hayward in Blackheath agreed that price rises across Greenwich have been “astronomical” over the last year, but warned that first time buyers needed to be realistic about the type of property on offer to those on limited budgets. The cheapest flat he can currently offer is a “pokey” one bedroomed flat in Shooters Hill, on the market for £215,000 or a studio flat in Lewisham for £250,000.
The area Cooley has seen biggest growth in over the last year has been east Greenwich, thanks to an overspill of buyers priced out of central and west Greenwich. He estimates prices have risen in this particular area by between 30 and 40 per cent.
The most economical options include Bexley (£174,753), Havering (£183,921) and Newham (£184,176). However the research also shows that first time buyers face something of a Catch 22. Because although they will naturally be driven towards the cheapest boroughs what today’s research shows in graphic detail is that these areas are slow in price growth and still catching up from the recession. Prices in Barking and Dagenham are currently four per cent lower than in 2007, while prices in Havering and Newham are unchanged from levels seven years ago meaning that while these areas are affordable buyers cannot expect any capital growth in the short term and may, thanks to inflation, end up trapped in first homes.
Predictably prices are highest in central London: Kensington and Chelsea leads the pack with average prices of £595,455, followed by Westminster (£472,500) and Camden (£394,655). These areas have also seen the strongest price growth up 47 per cent in Kensington & Chelsea and 44 per cent in Westminster. Cooley says, ‘These areas are clearly the privilege of the rich. I cannot see how anybody else will be able to buy here.’