London set to see house price growth of almost 10% per year over the long term
London’s property market remains robust and healthy despite economic and political uncertainties with long term house price growth forecast to be close to 10% a year.
Real estate firm CBRE forecasts that prices in London are set to rise at 9.1% per annum, a third higher than the average rate across the UK.
The firm’s latest analysis report points out that this year the outer London boroughs have performed particularly well, with house prices in most increasing at a higher rate than the London average of 4%.
It says that increased activity in boroughs such as Havering, Waltham Forest and Barking and Dagenham reflects their relatively affordable status, as well as investment in to regeneration that brings new homes, better transport links and more employment opportunities.
The figures show that the highest house price growth in the last year has been in Kensington and Chelsea and Havering and the lowest in Camden. Over five year the highest was in Waltham Forest and the lowest in the City.
Rental growth over the last five years has been highest in Bexley and lowest in Newham while the report forecasts that over the next five years Southwark, Camden, Islington and Tower Hamlets are likely to see the biggest rental growth and Kingston, Havering and Barking the lowest.
‘Regardless of the ongoing political upheaval, London remains an attractive place to buy a property. Its success is down to a variety of factors, such as education, language, time zone, fiscal policy and strong business environment,’ said Jennet Siebrits, head of residential Research at CBRE.
She explained that London’s population growth over the next decade is predicted at 11%, which means an additional 52,000 new homes need to be built each year to keep up with demand, yet currently only half of that is under construction.
‘The report highlights the continued importance of regeneration and infrastructure to safeguard the future of London as a thriving home for people from all around the world, opening up relatively affordable pockets of London for buyers and job seekers, and encouraging positive house price growth,’ she added.
According to Mark Collins, chairman of residential at CBRE, each individual borough has strengths and diversity with Barking and Dagenham the most affordable borough and a first time buyer hotspot. ‘Residents will benefit from the ongoing regeneration and the potential price growth this offers,’ he said.
He also pointed out that Croydon is continuing to see huge rewards from the ongoing council led transformation, worth £1billion and prices have increased 68% over the past five years. ‘It’s many transport links make it one of the most accessible boroughs in the capital,’ he added.