Property insider: The London areas where house prices have risen the most in the past 10 years

House prices in the capital have risen significantly in the past decade, with prices in every borough up more than 60 per cent since 2007
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In the past eventful decade, London has continued to reinvent itself, as new transport links and regeneration programmes have created entire neighbourhoods that didn't exist 10 years ago.

A decade ago this month, Northern Rock teetered on the brink of collapse after investors withdrew more than £1billion from the building society in one day in September 2007.

The next 10 years have been shaped by the effects of the global financial crisis that followed, which has had far reaching effects on the London housing market. Interest rates have remained low, the Bank of Mum and Dad has become a major player in lending and home buyers are trading up the housing ladder far less frequently, according to research by Savills.

A DECADE IN LONDON HOUSE PRICES

Average price in 2007: £292,000

Average price in 2017: £478,000

(Source: Savills)

"One of the key features of the housing market over the past 10 years is the extent to which London has become dislocated from the rest of the UK, showing much higher house price growth in the period after the credit crunch," says Lucian Cook, head of residential research at Savills.

House price growth across Greater London rocketed during the last 10 years, with prices in every borough up by more than 60 per cent since 2007.

The average price of a London home in 2007 was £292,000; 10 years later this stands at £478,000, an increase of 78 per cent.

In contrast, prices across the UK are 11 per cent below their 2007 level, on an inflation-adjusted basis, according to recent figures from Nationwide.

10-YEAR GROWTH: THE STAR-PERFORMING BOROUGHS OF THE DECADE

The north-east London borough of Hackney is the 10-year star with house prices up a staggering 124 per cent, hitting £550,000 in June 2017, according to the most recent sold price figures from the Land Registry. This rise in popularity has created a noticeable change in the buyer profile, says Cook.

London’s three most expensive boroughs were also among the 10 places that have experienced the greatest price rises over the past decade.

The City of London was second only to Hackney for 10-year increases, with prices up 115 per cent to £724,000, while prices in Westminster rose 106 per cent to £1million. London’s most expensive borough, Kensington and Chelsea, saw a 102 per cent increase to £1.4million.

Other Zone 2 spots where the housing market has been transformed since 2007 include Southwark and Lambeth in south London, where prices rose 106 and 104 per cent respectively, and Islington in north London, where prices have doubled in a decade.

"Affordability was initially the main catalyst for millennials moving to these areas, underpinned by attractive period housing stock and good transport links. The advent of new businesses, bars, shops and restaurants has meant they have matured as locations which offer a new scene for twenty- and thirtysomethings," says Cook.

MAPPED: 10-YEAR HOUSE PRICE GROWTH ACROSS GREATER LONDON

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THERE'S SOMETHING ABOUT ISLINGTON
The real fillip to Islington’s reputation came 20 years ago in 1997 when Barnsbury resident Tony Blair became prime minister, says Paul Williams, head of the local Savills branch.

Since then, he says, Islington’s stratospheric price increase, to £645,000 in June 2017, has been a result of the increase in value of London property as a whole, as buyers priced out of the increasingly prime central market rippled their searches further out.

“The mid price point for London property has shifted up,” explains Williams. “Islington was very popular with the media and lawyers in the Seventies and Eighties because it was incredibly good value compared to other residential areas of London. It still is, if you compare it with Marylebone or St John’s Wood.

“Go two miles east, however, and you can get similar houses for not much less than half the value of Islington on the other side of Hackney – Bethnal Green and beyond, which is very popular with younger buyers now.”

GROWTH HOTSPOTS IN THE PAST FIVE YEARS
As affordability in London has become stretched beyond the limits of even affluent households, people “are buying in areas they would not have considered pre-global financial crisis”, according to a report from Lucian Cook, director of residential research at Savills.

“The gap between London and its hinterland has only recently shown signs of narrowing. In the last five years, the less affluent boroughs have typically played catch-up, as buyers have widened their search, seeking to stretch their buying power as far as possible."

MAPPED: FIVE-YEAR HOUSE PRICE GROWTH ACROSS GREATER LONDON 2012-2107

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Cook notes Waltham Forest as one of the star performers, where prices have doubled in the past five years; and Lewisham, where they have risen by a staggering 80 per cent, thanks to buyers opting to move to the “next-most-desirable” markets that are more affordable and accessible than perhaps their first choice.

At the moment, that appears to be outer east and south London, where house price growth has been highest in recent years.

THE RISE OF OUTER EAST AND SOUTH LONDON
In the top five boroughs, all of which are in east London, average prices rose by 13.3 per cent in Havering to £362,000 in the year to May this year, with similar increases in Barking and Dagenham (up 13%), Waltham Forest (12.2%) and Newham (10.7%). Bexley, in south-east London, has seen prices rise by 11.7 per cent year-on-year.

Redbridge, Sutton, Croydon, Bromley and Enfield – all at London’s outer boundaries – complete the top 10 for the biggest house price growth.


MAPPED: HOUSE PRICE GROWTH ACROSS GREATER LONDON IN THE PAST YEAR

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LOOKING AHEAD
Savills forecast that this outward ripple effect will continue in the next few years, hitting commuter belt areas across the south of England as first-time buyers in particular seek to stretch their budgets as far as possible.

“Equity generated in the London housing market among older households is likely to continue to be exported into the commuter zone.”

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