"The punitive levels of stamp duty introduced on high-value properties at the end of 2014 had a long-term chilling effect on Prime Central London"
While transactions fell across the capital in 2016, the drop-off was sharpest in areas that had previously seen some of the most frenzied activity. The Hipster hotspot Hackney – where average property prices have risen an extraordinary 117% since the start of 2009 – saw sales collapse by more than a third (37%) last year.
Meanwhile in the City of London, where average prices have doubled (106% increase) since 2009, transactions nearly halved in 2016 (46% fall) and prices slipped by 9% on their 2015 levels. Even Kensington & Chelsea, the genteel epitome of Prime Central London, saw prices drop by 5% and sales slip by a quarter (24%) in 2016.
At the other end of the scale, formerly overlooked Eastern boroughs are now in the midst of a full-scale boom. Havering, which has seen average prices rise by a relatively modest 79% since 2009, posted blistering price growth of 18% last year. Likewise Barking & Dagenham, which also clocked 18% price growth in 2016 and saw transactions fall by just 10%, the smallest decline in London.
Jonathan Hopper, managing director of the buying agents Garrington Property Finders, comments: “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.
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.
There are several factors behind this shift in momentum. The punitive levels of stamp duty introduced on high-value properties at the end of 2014 had a long-term chilling effect on Prime Central London, 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.
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.”
