Many London boroughs continue to see house price growth in double figures although the average rate is slowing.
Research from the Office of National Statistics (ONS) shows the top ten boroughs with house price growth of 17% or more over the last year compared to London as a whole up by 12.3%.
For buy-to-let landlords would need a larger deposit or higher rental incomes to cover the interest payments.
Prices may be kept high due to the fall in properties available on the market in England where sales have reduced 33.5% from 74,897 over the year to 49,795 in May 2016.
Other areas have also seen reductions in sales in Wales 29.6% lower, Scotland 16.8% down and Northern Ireland a fall of 21.6%.
The average house price for the UK is £216,750 compared to first time buyers with £182,756 and home movers with £251,443.
London boroughs with strong growth
Over the year to July house price growth in London boroughs has remained strong with Newham leading on 20.8% with an average property price of £359,231 followed by Haringey at 20.2% and average prices of £359,231.
Average house prices and annual change for July 2016 from the ONS are shown below.
| London Borough | House Prices |
Annual Changes |
|---|---|---|
| Newham | £359,231 | 20.8% |
| Haringey | £569,376 | 20.2% |
| Hillingdon | £417,684 | 19.7% |
| Havering | £348,973 | 19.7% |
| Waltham Forest | £424,824 | 19.5% |
| Croydon | £365,479 | 19.4% |
| Redbridge | £409,025 | 19.3% |
| Bexley | £328,107 | 19.2% |
| Lewisham | £421,155 | 17.9% |
| Barking and Dagenham | £276,145 | 17.2% |
The average price of a London property is £484,716 an increase of £12,512 over last month and nine of the top ten and lower than this figure offering better value for money.
One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements.
In addition older homeowners have considerable value in their properties and the equity release mortgage buyer can access this wealth using this to consolidate debt or home and garden improvements.
More expensive areas of London are decreasing such as Camden with house prices lower by 0.6% to £788,065, Hammersmith and Fulham lower by 1.6% to £760,245 and Kensington And Chelsea down by 3.0% to £1,287,850.
UK house price growth slowing
For the whole of the UK house prices for July are 0.4% higher over the last month and 8.3% higher in the last year.
The ONS has said this growth reflected the strength of demand relative to supply in the housing market. However, there were indications pointing towards weaker housing demand and supply in recent months.
The Royal Institute of Chartered Surveyors (Rics) report that new sales listings on the market has fallen at the fastest monthly rate on record for each of the last three months.
Average property values and annual change for July 2016 from the ONS are shown below.
| Area | Annual Changes | Property Values |
|---|---|---|
| London | 12.3% | £484,716 |
| South East | 11.9% | £313,315 |
| East of England | 12.1% | £273,806 |
| South West | 7.8% | £237,291 |
| England | 6.4% | £232,885 |
| West Midlands | 6.4% | £176,598 |
| East Midlands | 7.8% | £173,783 |
| Yorks and the Humber | 4.7% | £151,581 |
| North West | 6.1% | £150,082 |
| Wales | 4.0% | £144,828 |
| Scoltand | 3.4% | £143,711 |
| North East | 5.8% | £129,750 |
| Northern Ireland | 7.8% | £123,241 |
For the UK the average price of a resold property by a home mover or buy-to-let landlord was £212,941 and this has increased by 7.8% over the year.
In comparison the average price of a new-build property is £273,072 and this has decreased by 2.1% over the month but remains 15.6% higher over the year.
In London the average prices are £506,525 for new-build properties up 18.2% for the year and lower by 2.4% in the last month.
New-build homes in London are sold at a premium of only 4.8% to existing property prices which is relatively low compared to other areas. All other areas including the South East have a new-build premium of 20% or more.
For example, the North East where prices are much lower such there is a premium of 53.3% where the new-build price is £191,746 compared to existing prices of £125,051.
Demand remains high for new homes with supply up 3.5% for the year compared to July 2015 although it remains unclear how the EU Referendum will impact the housing market.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as improve your quality of life or even benefit a family member.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
