Are property prices rising at the same rate across London?
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This week our property expert Simon Gerrard answers reader Sadi Mannan’s question about whether to sell an inner London flat and trade up to a house further out
I have flat in inner London and want to buy a house in outer London. Are property prices rising at the same rate across London? And if they’re not am I better off waiting or selling up and buying a new place as soon as possible?
Property price fluctuations all stem from the levels of demand over supply, but the main factor that affects values is confidence. While there are a raft of different factors, including global, political and economic concerns, that can influence the national property market, a local area’s surroundings and popularity can have just as much of an impact.
As the saying goes, Location, Location, Location. Being close to a well-respected school or good transport links can make the most difference as both have the biggest impact on prices.
Local infrastructure plans will also have a major bearing on local prices both positive and negative, for example HS2 and Cross Rail are both having an impact in parts of Camden.
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Finding somewhere in London where these constituents exist but have yet to be discovered is becoming increasingly hard as most areas are now well established or are already on their way up; even historically depressed areas are becoming rejuvenated. The large increases in central London were driven mainly by foreign investment and this has meant that those looking for an affordable place to live are being pushed further out.
The latest available figures from the Land Registry show a positive but mixed picture across London. Overall prices in the capital rose in the year to the end of August by 6.6 per cent. When this is broken down to individual boroughs the figures become more wide ranging. Outer London went up by 9.5 per cent, inner London by 4.8 per cent. Barnet and Haringey (both outer boroughs) rose by 9.2 per cent and 6.5 per cent respectively, while Camden (an inner borough) saw a year on year fall of 1.7 per cent.
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These figures show the change in prices by borough but the housing market, especially in London, is made up of a multitude of micro markets which can see price changes differ over a small area, even from road to road. You can carry out your own research using market data and sale price records readily available on websites such as the Land Registry, Zoopla and Rightmove as well as talking to local estate agents and, of course, reading Ham & High Property.
This country is obsessed with property prices and far too often we tend to look at the property we live in as an investment rather than a home. We often forget the most important question: Why are you moving? Because you need more space and move up the property ladder? Or is it as an investment speculation?
If it’s the latter you need to have a deep knowledge of the markets you are entering, be able to react and move quickly to changing conditions and ultimately decide whether or not you can afford to lose the money you are gambling with.
I would strongly advise against using your home in this way.
Every one of us when making an investment of any kind wants to buy at the bottom and sell at the top. But remember, you only know when it’s the bottom when prices are already rising and you know it’s the top only once prices have fallen.
If you are moving to improve your quality of life then the most important factor will be whether the area you are looking to buy in gives you the facilities and amenities together with the accommodation you need? Get three local NAEA estate agents to give their opinion on the value of your flat. Then speak with your lender or independent financial advisor and work out what budget you will have to spend on your new home. You will then be able to narrow down the areas that are affordable.
Ultimately the choice will come down to two considerations: 1. Personal need: Is it near my family, can I get to work easily, is it close to the school I want are all common questions and 2. Financial constraints: can you afford the price?
To answer the question directly, the rise in property prices in central London has slowed but in in the suburbs is still strong, so get your skates on!
Simon Gerrard is the managing director of north London estate agents, Martyn Gerrard and a former president of the National Association of Estate Agents (NAEA). Email your property questions for Simon to email@example.com or tweet @HamHighProperty