There is a polarisation in the London residential property market with a new analysis suggesting growth is rising in the east of the city while central hotspots have cooled.
Parts of central London have seen prices and sales falling while boroughs such as Havering and Barking and Dagenham are attracting more buyers, according to the research from buying agents Garrington Property Finders.
While the prime market in central London has declined due to stamp duty and tax changes, wealthier buyers are looking east, the research which examined prices growth and sales volumes in 2016 with the prevailing trends seen in the city since 2009.
While transactions fell across London in 2016, the drop-off was sharpest in areas that had previously seen some of the most frenzied activity. The hipster hotspot of Hackney where average property prices have risen by 117% since the start of 2009 saw sales collapse by 37% last year.
Meanwhile in the City of London, where average prices have gone up by 106% since 2009, transactions fell by 46% and prices were down by 9% in 2016 compared to 2015. In Kensington and Chelsea, which is popular with overseas buyers, prices fell by 5% and sales were down by 24%.
At the other end of the scale, Eastern boroughs are now in the midst of a full scale boom, according to the research. Havering, which has seen average prices rise by a relatively modest 79% since 2009, recorded price growth of 18% last year. Barking and Dagenham, also saw prices rise by 18% in 2016 and although sales fell 10%, this was the smallest decline in London.
‘The prime central London property market endured a tough 2016 with sales falling by 18% on the previous year and price growth either reducing or slipping into reverse,’ said Jonathan Hopper, managing director of Garrington Property Finders.
‘By contrast prices rose strongly in several outer boroughs, especially in the East. Havering in particular is enjoying a surge in interest among both investment buyers and those looking for a home, after it was revealed that the new Elizabeth line will cut the journey time from Romford to central London to barely 30 minutes,’ he explained.
He pointed out that there are several factors behind this shift in momentum including higher levels of stamp duty introduced at the end of 2014 and Brexit uncertainty has further hampered buyer sentiment.
‘However for the astute and wealthy, last year’s price falls in the City and Kensington and Chelsea represent a buying opportunity, especially for those based overseas who are able to benefit from the weak Pound,’ said Hopper.
‘By contrast several outer suburbs have seen much more modest price growth since the 2009 trough, and so offer both value and growth potential. With regeneration and the prospect of better transport connections thanks to Crossrail, these areas are the ones to watch in 2017,’ he added.