The capital’s housing market is showing signs of recovery this year but Londoner’s are finding it difficult to buy or rent a home.
Properties in Hackney, Lewisham, Croydon and Tower Hamlets have steadily increased in price over the past 10 years and this may be affecting first-time buyers.
The Royal Institution of Chartered Surveyors (RICS) says the UK housing market appears to be finally showing a recovery as buyers return to the market in their largest numbers in four years. In the latest indication that a recovery in the property market is under way, RICS also said that “Help to Buy” as well as other initiatives have prompted the sector to “turn a corner”.
“These results are great news for the property market as it looks like at long last a recovery could be around the corner. Growth in buyer numbers and prices have been happening in some parts of the country since the beginning of the year but this is the first time that everywhere has experienced some improvement,” said Peter Bolton King, RICS Global Residential Director.
According to London Council’s Welfare Report this year Londoners are finding it increasingly difficult to find affordable housing to rent or buy. This was made even more difficult by changes to the benefits system. However, affordability is a supply and demand issue and the imbalance in London has seen prices and rents soar over recent years with no prospect of relief in sight.
There are 8.2 million people living in London and the capital’s population is expected to increase to 9.4 million by 2021. Based on data from the 2011 Census, London needs to build at least 40,000 new homes every year just to keep pace with demand. Yet in 2010/11 there were just 19,860 new homes built in the capital. In the first half of 2012/13 the total number of affordable homes built in the capital was just 5,220 also shown in London Council’s most recent report.
“The cost of buying your own home in London increased by more than three times the rate of an average salary over the past ten years and this leaves millions of people out of reach of ever getting on the housing ladder,” said a spokesman of the National Housing Federation.
According to the National Housing Federation property values have risen across London. Some of the most significant rises have taken place in Hackney with increases up to 98 per cent; in Croydon 77 per cent, Lewisham 99 per cent and Tower Hamlets 66 per cent.
As well as property selling prices, rental rates are also rising in London. Rightmove is one of the UK’s most important property websites and it shows these figures:
House prices in Hackney
Last year most property sales in Hackney involved flats that were sold on average for £349,459. The priciest area within Hackney was Shoreditch (£464,159) and the least expensive was Trowbridge Estate (£319,226). During the last year, selling prices in Hackney were 9 per cent up on the previous year.
House prices in Tower Hamlets
Most of the sales in Tower Hamlets over the past year were flats, which on average sold for £341,647. The most expensive area within Tower Hamlets was Spitalfields (£676,619) and the cheapest was Lansbury (£249,312). In the past year house prices in Tower Hamlets were 3 per cent up on the year before.
House prices in Croydon
Last year most property sales in Croydon involved flats, which sold for on average £179,081. The priciest area within Croydon was Woodcote Green (£676,671) and the least expensive was Coulsdon North (£117,000). During the last year, selling prices in Croydon were 3 per cent up on the previous year.
House prices in Lewisham
The majority of sales in Lewisham during the last year were flats, selling for an average price of £223,224. The most expensive area within Lewisham was Blackheath (£433,983) and the cheapest was Downham (£192,244). Overall selling prices in Lewisham over the last year were 9 per cent up on the previous year.
“A shortage of homes means the price to buy them is being pushed ever higher and out of reach of millions of hard-working families. Unless we start building more homes people can truly afford to match the demand, this will only get worse”, said Michelle Smith, London Lead Manager at the National Housing Federation.
While London Councils are preparing a strategy policy for September, a spokesman said they continuously lobby the government to lift the cap on the money councils are allowed to borrow in order to fund new home building.