And it's Hackney that has seen the steepest growth of any borough in the capital.
What’s the latest?
The average cost of a home in London has soared by almost £500,000 during the past 20 years.
House prices in the capital jumped nearly five-fold from £105,266 in 1996 to £578,381 at the end of last year.
But some of the capital’s more affordable boroughs also showed significant price growth, according to Lloyds Bank.
Why is this happening?
Two distinct markets have developed in London, a prime market and a mainstream one.
Andrew Mason, mortgage director at Lloyds Bank, said prices in the prime market, which covers London’s most affluent areas, saw strong gains during the boom between 1996 and 2008.
Meanwhile, he attributed the rises seen in Waltham Forest and Newham to the Olympic regeneration programme and improved transport links.
Above: five-bedroom house for sale on Queens Gate Villas in Hackney
Who does it affect?
The strong price growth in the capital has widened the gap between the cost of property in London and the rest of the country from just £33,834 in 1996 to £299,631.
At £278,750, the typical home in England and Wales now costs less than half of one in London, where properties average £578,381, rising to a massive £1.6m in the most sought-after parts of the capital.
Unsurprisingly, these price rises have led to affordability becoming increasingly stretched in the capital. Property values in London are now nearly 12 times average earnings, up from just four in 1996. And that doesn't bode well for people trying to get on to the housing ladder.
However, it is welcome news for investors and homeowners who bought London property many years ago; they will be sitting on substantial housing equity.
Sounds interesting. What’s the background?
Between 1996 and 2016, 20 boroughs in London saw average prices rise by more than £400,000.
Kensington and Chelsea saw the biggest increase in monetary terms, with property values soaring by £1.6m, the equivalent of a gain of £6,498 every month.
In 1996, average house prices were less than £100,000 in nearly two-thirds of London boroughs, but today they cost more than £500,000 in 58% of them.
Overall, the total value of private housing in London is now £1.27trn.
Below: steepest house price growth in London 1996 - 2016
Average house price 1996
Average house price 2016
20 year change (£)
20 year change (%)
|City of London||£136,344||£908,759||£772,415||567%|
Top 3 takeaways
- The average cost of a home in London has soared by nearly £500,000 during the past 20 years.
- London house prices have jumped from £105,266 in 1996 to 578,381 at the end of last year – a massive 449% rise.
- Hackney in north east London posted the steepest growth at 702%, followed by Westminster at 648% and Southwark at 626%.
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