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House Prices Running Away at This Year’s London Marathon
In anticipation of the London Marathon this Sunday, Nationwide Building Society reviews a decade of house price rises in the five main London boroughs in which the race passes through:
Greenwich
At the race’s starting point, the price of a typical house now stands at £268,194. This is more than £48,000 higher than this time last year and the equivalent of a rise of more than £100 per day. Of the five boroughs, Greenwich is closest in price to the average house price for London - £280,995. Prices in Greenwich have risen by 279% over the past ten years. Greenwich is one of five host boroughs for the 2012 London Olympics. For more than a decade, the local council has orchestrated one of the largest regeneration programme's in the UK, resulting in improved transport infrastructure, new housing and thousands of new jobs in the area.
Lewisham
As the gradient of the race descends between Greenwich and Lewisham, so do house prices. Lewisham is the cheapest place to buy out of the five boroughs with the average house priced at £263,796 (on average, more than £4,000 less than Greenwich). Having said that, prices in Lewisham are still head and shoulders above that of other London boroughs including Bromley (£250,363), Barking & Dagenham (£198,783) and Havering (£215,570). Even though it is the cheapest of the five boroughs, Lewisham has one of the strongest rates of growth – house prices have increased by 283% since 1997. This could be linked to a major regeneration programme introduced by the local council back in 1999 (the Urban Renaissance in Lewisham project). Much work has already been done to improve transport links and leisure facilities in the area in order to raise the profile of the borough. Further improvements are planned with the launch of the ‘Lewisham Gateway Development’ in 2008.
Southwark
Further along the route, house prices are £72,519 more expensive. The average house price in Southwark is £336,315. This is an increase of £57,326 compared to the same time last year, the equivalent rise of £157 per day. Southwark is the borough, jointly with Lewisham, to have seen the strongest growth rate in the last ten years – 283%. In common with most of the south bank of the Thames, Southwark has seen extensive regeneration in the last decade, which has changed the face of the borough. Southwark features a diverse mix of council estates, major office developments and high value residential gated communities, in close proximity to each other, with 40% of the borough currently undergoing regeneration.
Tower Hamlets
Across the river, house prices continue to rise, with the price of a typical house in Tower Hamlets topping £352,127, the second highest of the five boroughs. However, residents of Tower Hamlets have seen the slowest house price growth over the last ten years - 262%. In the past year, prices have increased by a modest £53,242, compared to the other four boroughs - the equivalent to a £146 rise per day. Tower Hamlets is an area of spectacular regeneration and development. Over the last ten years, the local economy has undergone major structural change and Tower Hamlet’s business community continues to grow, bringing increased investment to the area. Despite significant development around Canary Wharf and the City fringe, there are still high levels of deprivation experienced by many local people. Going forward, the Olympics is expected to have a big impact on the area, bringing with it more jobs, more homes, better transport and improved recreation and sport activities.
Westminster
With the finishing line in sight, Westminster is by far the most expensive borough of the five. The average house here will set you back £563,293. Prices have risen by more than £112,000 in the last year alone – the equivalent of almost £307 a day. Despite this, house price growth of a ten year period has been slightly slower than that of Greenwich, Lewisham and Southwark at 266%. Westminster is the epicentre of London and its entertainment and shopping represent Britain’s multi-cultural heritage, attracting visitors from all over the world. The borough encompasses prime residential areas such as Knightsbridge, Belgravia and Mayfair and is home to the majority of London’s luxury hotels and prime retail areas. Future redevelopments have been proposed to ensure continued prosperity in the area.
Nationwide’s chief economist, Fionnuala Earley, said: “The strength of London’s economy is a major factor behind the buoyancy of it’s housing market. Development of infrastructure and the anticipated gains of regeneration resulting from investment for the Olympic Games have helped to inject further confidence in the market.
“The outlook for the London housing market still looks rosy given the economic conditions it faces. A lack of housing supply is also a factor that will support house price growth. However, London is not immune from rising interest rates and deteriorating affordability. We would expect the rate of house price inflation in London to cool from the current level of 14.3%, but to remain at a robust level, by the end of 2007”.
For further information:
Natalie Tate, natalie.tate@nationwide.co.uk, telephone 01793 655354
Katie Harper, katie.harper@nationwide.co.uk, telephone 01793 656215
Notes to editors
- The average price for London is produced using Nationwide’s updated mix-adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. All changes are nominal and do not allow for inflation. The methodology can be found on our website: http://www.nationwide.co.uk/hpi/
- Sub-regional price changes are based on the price per unit area of the properties in the sample. Samples are smaller than at a regional level and figures should not be relied upon for any critical application. Figures are not directly comparable with mix-adjusted indices
- House price data produced by Nationwide Building Society (correct as at 16 April 2007)
- Further information about each borough is available at: www.greenwich.gov.uk; www.lewisham.gov.uk; www.southwark.gov.uk; www.towerhamlets.gov.uk; and www.westminster.gov.uk
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