What has happened to the price of your house over the past 20 years?
- Credit: Archant
What has happened to house prices in Camden over the past 20 years? The short answer is also the obvious one – they’ve gone up, a lot.
Between 1995 and 2014 house prices in the borough increased 5.5 times according to figures from the Office for National Statistics, which measure the median house price for all properties sold in a year, as well as for different categories of property.
Prices have slightly more than doubled each decade, rising from £122,000 in 1995 to £325,000 in 2005 and hitting £675,000 last year.
Research by estate agent Savills found that across London house prices have risen by an average of 25 per cent after the cost of inflation, with real house prices more than 50 per cent above their level of 10 years ago in nine out of the city’s 33 boroughs. Unsurprisingly, this includes Camden, where 10 year real house price growth totalled 61.5 per cent, according to the Savills data.
Why have house prices in Camden grown?
One reason is simply that it’s in London – and a by no means shabby part of the city at that.
According to Lucian Cook, director of residential research at Savills: “Ignoring marked highs and lows across market cycles, the inflation adjusted, long-term trend rate of house price growth in London is 3.6 per cent per annum compared to 2.3 per cent in the North East of England.
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“This may not sound like a big difference, but over a 40-year period it equates to real house price growth of 322 per cent compared to 146 per cent.”
This is partly thanks to the types of work and employment available in London compared to the rest of the country. The capital has a far higher proportion of businesses in high value sectors than the rest of the country. Between them, the boroughs of Camden, Islington and Hackney have seen 6,100 new businesses emerging in the past five years says Cook.
Highs and lows
The pattern across London over the past 20 years has been for fairly steady rises, with even world-jolting events like the collapse of Lehman Brothers registering as only relatively minor blips on the inexorable rise of house prices.
Traditionally well-heeled boroughs like Camden, Westminster and Kensington & Chelsea have seen the most reliable longterm increases, while London’s cheapest borough, Barking and Dagenham, has seen more modest rises.
James Morton, director of Benham & Reeves explains the peaks as reflecting periods of particularly high demand in a borough where supply is consistently low.
“When prices jump it’s normally because demand is so huge. In 2006, 2007 and 2010 we saw prices jump,” he says. “In 2010 in particular it was as a result of a lot of pent up demand following all the uncertainty of the crash in 2008.
“Since 2010 demand’s been pretty high but supply’s been very low. There’s always been a shortage of supply for as long as I’ve been working in Camden.”
Nick Collins of Hadleigh Residential in Belsize Park is also keen to point out that these apparent spikes actually represent a speeded up correction of the market.
He says: “After a period of stagnation, when the market starts to move again, you have all the growth that you would have had during those years happening in a much shorter period of time. It looks like accelerated growth but it’s really only the same as if it had been rising for all the years when nothing was happening.
“If you showed prices dating back to 1987-88 when the market crashed completely and absolutely nothing happened, then the 1995 figures would seem to have shot up. It’s because before that absolutely nothing happened, it was like tumbleweed. But when it did come back, it came back high.”
The French touch
Migration, both on a national and international level is another key driver of demand in the London property market.
In Camden this is as true as anywhere, with people from all over the globe drawn to a borough which is at once central and leafy, traditional and trendy. In recent years, this influx has been speaking one language: French.
“Hampstead’s always been very cosmopolitan but the global market has just got stronger and stronger. When Hollande got elected all the financiers, lawyers, and hedge fund guys came over here and started looking for property,” says James Morton, director of Benham & Reeves. “Our Dartmouth Park office has experienced a huge influx of French people wanting to settle down here. We’ve got very good access to St Pancras and there’s also the French Lycee in Kentish Town.”
Safe as houses
While prices for all property in Camden has increased over the past two decades, houses of all varieties have seen the biggest leaps. The price of detached houses increased 589 per cent, terraced houses went up 672 per cent, and semi-detached houses leapt 764 per cent from £220,000 in 1995 to £1,899,950 in 2014. Meanwhile, flats and maisonettes saw a lower, though not insignificant, jump of 477 per cent.
Nick Collins attributes this in part to greater individual wealth, and richer individuals becoming more attracted to areas within Camden than previously.
“When the developers came into places like Belsize Park and Hampstead in the past they’d take a house and split it up into flats,” he says. “For the past few years, developers have been doing the other thing, which is turning them into single houses.
“Even so in Camden you can only drop density by one, so if you have a house of five flats you can only make into four, so as to preserve diversity in the type of accommodation in the borough and the people who live there.”
This enforced limit on supply, combined with greater demand, all adds up to higher prices.
“Our flats, on average, are around £1,100 per square foot; for a house it’s £1,400 to £1,500,” says Collins. “Those figures are specific to Belsize Park but I’m sure that ratio will bear out throughout the borough, even if the figures are different.”