London Evening Standard/London
Record low mortgage rates are driving massive demand for homes in London’s booming “super suburbs” where property prices are soaring at up to 20% a year.
Latest official figures yesterday revealed a post-Brexit “Tale of Two Cities” with rapid growth in more affordable areas to the east or in outskirts favoured by first-time buyers, while central London’s property market languishes.
The biggest jumps in England were seen in Newham, where average prices rocketed 20.3% to £371,139, and Barking and Dagenham, where they are up by 19.3% at £290,583, according to the Land Registry.
Other areas with strong double-digit increases included Havering (18.6%), Croydon (16.6%) and Redbridge (16.5%).
Jonathan Hopper, managing director of home buying agent Garrington Property Finders, said: “The conclusion is clear – four months on from the shock Brexit result, and the sky has resolutely refused to fall in. In fact, annual rates of price growth remain comfortably above where they were a year ago.”
Property experts said the autumn house market had been turbo-charged by the Bank of England’s decision to drop its interest rate to a record low of 0.25% in August.
The cut dragged down the cost of borrowing for home buyers to levels never seen before.
The average two-year fixed rate stood last month at 2.34%, a new record low, while average five-year deals are below 3% for the first time.
Although the 10.9% annual rise for London as a whole was a slowdown from the 12.1% recorded in August, a strong monthly jump of 1.4% was bigger than anywhere else in the country, suggesting that the London market is far from running out of steam.
Ben Madden, managing director of London estate agent Thorgills, said: “London has shown remarkable fortitude in outperforming all other regions of the UK.”
Richard Snook, senior economist at PwC, said: “We now have three months of post-Brexit official housing figures, which show price growth remaining robust, but fewer properties changing hands.
“At the start of the year, we expected slower house price growth, but in fact it has shown impressive resilience.”
By contrast prices in the once red hot – and most expensive – boroughs of central London, continue to flatline under the pressure of the huge stamp duty burden on properties over £1mn and uncertainty about Britain’s post-Brexit future.
The biggest annual fall in average prices was in Hammersmith & Fulham where they were down 2.9% to £757,131, the fifth biggest annual drop of any local authority area in Britain.
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