London house prices have plunged at the fastest rate for nearly ten years amid uncertainty over Brexit, according to new figures. Although not all homeowners are equally effected.
The capital’s housing market was down by 1.6% in the year until January 2022, the biggest annual drop since September 2009, according to data in the UK House Price Index.
We have explored how house prices have changed in each and every London borough over a 12-month period as the UK prepares to exit the EU.
Find out whether costs are rising or falling inside your borough, and where homeowners happen to be hardest hit.
London house prices hit by Brexit
Average house prices across the UK rose by 1.7% in the year up until January 2022, yet prices within the capital dropped.
Which? examined how house prices changed working in london between January 2022 and January this season using data in the Land Registry’s UK House Price Index. The averages are based on all property types.
Westminster experienced the biggest fall, using the average price visiting 14.03% – from lb1,116,077 in January 2022 to lb959,466 in January 2022. The central London borough of Camden was close behind, with prices plunging by 8.25%.
However, this news wasn’t all bad. The town of London leapt by 8.2% to some high of lb868,258 – however, there are limited home sales in this area. The outer suburbs of Ealing and Newham also saw substantial increases within their average price, of 4.95% and 4%, respectively.
You can look for your borough in the table below.
Are all London boroughs at risk of price falls?
While the typical price over the capital has fallen, some areas are more affected than the others – and the worst hit areas tend to be investor hotspots.
The prime housing market, in the heart of London’s transport zones 1 and 2, saw the heaviest falls in price. Nearly all boroughs in this region suffered a significant decrease, with Hackney, Islington, Kensington and Chelsea, Lambeth, Tower Hamlets and Westminster all seeing values drop.
These boroughs are particularly popular for international investment. It might be that the marketplace is slowing as foreign investors delay creating a move throughout the Brexit negotiations.
It’s also worth bearing in mind the cost in these areas is exceptionally high – between lb800,000 and lb1m – so rises and falls in value can seem more extreme.
By contrast, outer London boroughs between transport zones four and eight – for example Barking, Ealing, Havering, Hillingdon, Newham and Sutton – all experienced a boost in house prices in the 12-month period.
These areas tend to be more well-liked by families and first-time buyers, who may be unlikely to alter their plans based on Brexit. So, if you’re a house owner working in london, you shouldn’t panic just yet.
Mark Hayward, leader of NAEA Propertymark, your body for letting agents, said: ‘House prices are falling because of general uncertainty about Brexit and also the future thereafter.
‘There’s evidence that this phenomenon isn't restricted entirely to London. However, London has outperformed in terms of house price inflation and the rest of the country quite significantly, and there might certainly be some element of correction.
‘The prime marketplace is feeling the impact a lot more than non-prime, and this is spreading out to both London and also the East.’
Buying a home or flat in London
If you’re planning to buy a home or flat in London, the slowing market could be an opportunity to snap up a bargain. But prices in the capital, even in the least expensive areas, still tend to be well-above the UK average.
To balance the cost of London property, there are a variety of schemes designed to give buyers an advantage.
London Help to Buy scheme
The Assistance to Buy scheme offers people purchasing a new-build home an equity loan in the government which is zero interest for 5 years. This cuts down on the amount you have to borrow from a mortgage company.
In London, you can borrow up to 40% of the property's value on homes worth as much as lb600,000. You’ll require a deposit of at least 5% – meaning you could take out a home loan for just 55% of the home’s value.
There are limits, though, and you’ll need a plan for repaying the equity loan.
Shared ownership
If you can’t afford to purchase a home outright, shared ownership might be an option for you.
The scheme enables you to buy share of between 25% and 75% in a property, and pay rent around the remaining share.
Rent to buy
The Rent to Buy scheme helps people struggling to save up a first deposit by permitting you to definitely rent a home at 20% below the normal market rate for up to 5 years.
During this time, you’ll obtain the option to buy the whole property or area of the property with the shared ownership scheme.
See our guide to Purchasing a house or flat in London
