Croydon house prices continue sharp increase – but remain affordable by London terms
Croydon’s house prices have continued to rise in the third quarter of 2014, according to the latest figures published by the Nationwide. Growth in the year Q3 2013 to Q3 2014 has been 24%. Whilst seemingly a large rise (and certainly well above the 10.5% year-on-year rise in the UK as a whole) in London terms this has been just above average, with the capital as a whole recording a 21% growth in house prices since the same point last year.
The average price for a house in Croydon is now £312,973; the borough is the fourth cheapest in London, and occupiers may be concerned that for an area with such comparatively cheap prices and potential, growth is not as high as might be expected. Of course, this is better news for potential buyers.
Fear not, however. House price growth in both London and the UK as a whole has cooled somewhat in the previous quarter, with house prices in the country as a whole actually falling 0.2% in September 2014.
So why has interest dropped off in the housing market as a whole? New mortgage restrictions, under the banner ‘Mortgage Market Review’, have imposed more stringent checks on those applying for mortgages, leaving only 64,212 mortgage approvals nationwide in August 2014 – down from 76,000 in January 2014, according to the Bank of England. Uncertainty over the general election in 2015, expected interest rate rises and house prices rising at faster rates than wages have all dampened enthusiasm in the residential sales market. It must also be factored in that summer is generally a slow time for the housing market, which may have influenced the statistics.
What does this all mean for Croydon?
Whilst property prices may have slowed down in recent months, it is not expected that they will decline any time soon; rather prices in other areas of the country, in particular the commuter belt outside of Greater London, and deeper into Surrey, Sussex and Kent, are expected to rise at a greater rate than those within the capital.
As a London borough therefore, Croydon represents an excellent investment opportunity; with prices still relatively low, and yet increasing at a higher rate than both the UK and London averages, there is no reason to suggest that property prices will not continue to improve within the borough.
Cheap house prices also represent an excellent opportunity for businesses to relocate to the town; a concern for Greater London as a whole in the future is whether the increasingly unaffordable nature of its houses will start to push businesses away from the city, and into other countries and cities where a skilled workforce can afford to live in relative proximity. With #Croydon #TechCity embarking on another ambitious year, businesses looking for continued low office rents and good transport links yet affordable homes for skilled workers could do a lot worse than look at Croydon.
Understandably, there is still considerable concern amongst the Croydon community surrounding the unaffordability of houses (albeit relatively cheap by London standards). Whilst it must be stressed that London is now ranked as the most expensive city in the world to live in – and Croydon is a constituent borough of that city, hence high prices must be expected – those who are able to get on to the housing ladder in the town are making a sound investment. For those who find it more difficult, government initiatives such as Help to Buy are proving a success for first time buyers (FTB), with 28% of all house purchases in August 2014 being completed by FTBs.