Outer London house price growth outpaces the centre
A long row of Victorian townhouses in West Hampstead, London.©iStock
House price growth in outer London has accelerated as rises in the centre have slowed, underlining the dynamic variations in the capital’s property market.
Buyers are shifting their focus to the outer boroughs, where average annual growth is running at 11.3 per cent versus 5.7 per cent in central London, according to new research from property consultancy CBRE. This compares with figures in 2012 showing growth of 7.2 per cent in the centre versus a sluggish 0.4 per cent in the outer ring.
“We’ve seen significant growth in the outer boroughs,” said Jennet Siebrits, CBRE head of residential research. “The growth is swapping over.”
Outlying boroughs where prices have increased include Waltham Forest, Enfield, Sutton and Barking and Dagenham.
The surge in outer London comes as the sales of homes worth over £1.5m in London and the Southeast have dropped by 17 per cent over the year, partly under the influence of pre-election fears about a mansion tax.
CBRE said it expected this market to pick up again soon, with “tentative signs of an upswing of activity over the coming months”.
“The bulk of the London market (£300,000 to £400,000) remains robust and transactions have been steady over the year,” it said in a regional development report.
The government’s flagship Help to Buy policy boosted house building in other parts of the country, such as the Southwest and the Midlands, where it accounts for 30 to 40 per cent of sales in some schemes, it said.
House price growth in the Southwest was highly variable depending on proximity to cities where demand was high. Bristol, for instance, saw rises of 10 per cent, against 4 per cent across the region as a whole. Buy to let purchasers accounted for the greatest share of buyers, followed by those downsizing and moving on to a second home. First-time buyers were in the minority.
Growth was more muted in the Midlands, with 1 per cent in poorer areas and 4 per cent in hot spots such as Solihull.
Some of the strongest growth came in Scotland, with house prices rising 13 per cent in the first three months of 2015. Ms Siebrits said the resolution of uncertainty created by the September independence referendum was part of the explanation.
CBRE said it was too early to draw firm conclusions about the impact of Scotland’s Land and Buildings Transaction Tax, which came into force in April 2015. However initial evidence suggested the savings it brought in a the lower end of the market had boosted transactions. For houses worth £500,000 and above, though, transaction numbers appeared to be falling as the tax kicked in.
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