The recent market data reveals a significant recovery for the London property market, with just one borough seeing negative price growth this month.
During the pandemic, many Londoners moved to suburban areas in search of spacious properties with work from home possibilities. However, the potential return to normality saw residents, students, and professionals coming back to the capital, driving up the demand for new homes and rental properties.
In February 2022, asking prices increased in every London borough except just one and reached an average of £667k. This figure represents the highest growth rate for London properties since 2016.
Currently, the annual property price growth in London reaches 7.3% on average. In addition, the capital recorded the highest number of homebuyers of any other UK area. This is relevant for both secondary properties and new-build homes in London.
Why do property prices rise?
The return to normality appeared on the cards, offices reopened their doors, and the Christmas lull has long gone. All this resulted in the recent buoyant property market activity in London and rising prices.
Moreover, the misbalance of supply and demand drives the heated activity even further. Almost every London area has seen rising property prices recently. However, there is one borough where home price tags have actually slightly fallen down. Read on to discover how the London property market performed last year and how it entered 2022.
The best- and worst-performing London boroughs
As the race for space has not seen the end, Outer London areas saw the most significant annual increase in property prices. On average, homes in Bromley became 11.5% more expensive and reached £610k in value.
Next, come Barking and Dagenham with similar figures reaching 10.8% and £362k. Homes in Havering saw a 9.9% spike in property values and prices reaching £458k.
Interestingly, property in Kensington and Chelsea, the most expensive London borough, likewise saw rising property prices. On average, home values jumped by 10.6% to an average of a staggering £1.68m.
Property experts point out a recent return of luxury home buyers who look for new homes in elite London boroughs. This trend is one of the main drivers behind the heated prime London property market.
On the other side of the league is Hackney. This borough became the only London area with a recent property price drop. Homes in this East London borough became 0.9% cheaper and fell to £653k. It is worth mentioning that over the past decades, property prices in Hackney saw a dramatic 500%+ increase, which means they may have reached and passed the peak.
Lastly, property values in nearby Haringey remained flat. On average, homes in the borough cost £626k. London boroughs are very different and suit different people. Savvy buyers benefit from researching the markets and exploring London neighbourhood guides to find out the perfect place for living in London without exceeding the budget.
UK house prices during the pandemic
The values spiked 9.5% on a year ago and reached an average of £349k, a new record figure for the country.
Between 2018 and 2020, property prices increased by just £9,000. It is in sharp contrast with the £40,000 increase since the pandemic hit.
The property supply cannot satisfy the demand, but real estate experts note the rising number of sellers in the market. Compared to the last year, 11% more sellers entered the property market and listed their homes.