London's 'feast or famine' property market: central prime property slumps while home values on the capital's fringes soar
London has developed a “feast or famine” property market with a glut of homes for sale in prime areas and a dire shortage in good-value locations such as Redbridge and Hounslow.
The number of homes on the market in Kensington & Chelsea has grown 38 per cent year on year, says a report today by Johnny Morris, head of research at Hamptons International.
Buyers are refusing to pay the high prices and many vendors are having to accept offers below the asking price.
A similar pattern is being seen on the fringes of prime London. Hackney, which has enjoyed spectacular price growth over the last year, today has 35 per cent more homes on the market than a year ago, according to Hamptons International.
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This suggests the east London borough’s sharply rising prices — up almost 10 per cent in the last year to an average £691,969 according to latest Land Registry figures — have put it out of reach for many buyers. Hammersmith and Fulham, meanwhile, has 34 per cent more homes on the market compared to a year ago, with Islington on 30 per cent more, and Camden on 29 per cent.
“In central London and higher-priced markets further out, the market is starting to favour buyers,” explains Morris.
At the other end of the price scale, availability of stock has shrunk in affordable Hounslow, down 15 per cent in a year. This suggests that buyers are moving further west, to a borough where an average home costs £415,267.
Property in Redbridge, Newham, Hillingdon, and Harrow is also in significantly shorter supply than it was last year — which is great news for vendors. Morris says: “With the number of homes for sale back at 2013 levels, open days and over-asking price offers are still commonplace.”
However, he points out that overall, the number of homes for sale across London is inching upward. This, he believes, suggests the capital might yet return to a more “normal market” with slow, steady price rises rather than boom and bust.