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London borough house prices rise even though the capital’s market is subdued

For several boroughs in London house prices are rising although the capital as a whole is struggling to keep pace.

Data from the Office of National Statistics (ONS) shows UK house prices grew by 4.5% in the year to October 2017 with an average property value of £223,807.

Although London house prices were up by only 2.1% over the year, the 11th consecutive month where growth was below the UK average, the top ten boroughs increased by 4.6% to 12.2%.

The City of London experienced recent falls with average property values down -20.3% to £723,576 to June 2017 and now bouncing back 22.9% or £166,000 in just four months to a value of £889,728.

For remortgage buyers these higher prices give them an opportunity to release capital which they can use to improve their home.

Popular boroughs with large price rise

Leading the capital’s boroughs is the City of London now 12.2% up on a year to October 2017 as buyers take advantage of the lower prices in the summer.

Average prices and annual change in London for October 2017 from the ONS for the top ten boroughs are shown below.
Borough Average price Annual change
City of London £889,728 12.2%
Greenwich £404,271 7.9%
Tower Hamlets £498,598 7.1%
Kingston upon Thames £515,912 6.5%
Merton £537,253 6.5%
Redbridge £426,488 6.3%
Hammersmith and Fulham £765,971 6.3%
Newham £380,293 5.8%
Waltham Forest £441,061 5.0%
Lewisham £425,029 4.6%
Strong house price growth was for Greenwich rising 7.9% or £29,600 over the year with average property values of £404,271.

Other strong gains are for Tower Hamlets rising 7.1% followed by Kingston upon Thames and Merton up 6.5% year-on-year.

The higher values in these boroughs allows the older equity release mortgage buyer to stay in their home while accessing the wealth in their property, using this for any purpose such as home and garden improvements or even buy a more expensive home.

There has been a shortage in housing stock and demand from first time buyers and home movers may be driving house prices higher in some boroughs.

House price rise over the year

Looking more closely at regional levels of the UK, the largest annual growth was in the East Midlands rising 7.0% with average property values of £184,544.

This was followed by the South West up 6.7% with values of £251,376 and the East of England higher by 6.1% to £289,168.

No regions were lower over the year, however, month-on-month eight of thirteen decreased with the North West lower by -2.0% followed by West Midlands, Yorkshire and The Humber down by -1.1%.

The borough of Brent in London has seen the largest house price fall, down -5.1% or £25,707 lower values over a year followed by Southwark down -3.6% or £18,547 lower values.

Buy-to-let landlords could take advantage of these for affordable properties as they would require a smaller deposit to buy and help to improve rental yields.

The reduction in house prices is good news for first time buyers as they would require a lower deposit or smaller mortgage to get on the property ladder.

The Bank of England has reported demand for homes has strengthened but there are signs of excess supply in London and the South East with excess demand in other UK regions.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or you are a buy-to-let investor.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage calculator and equity release mortgage calculator.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to improve your quality of life or reduce inheritance tax owed by your beneficiaries.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.


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