London housing market – recent trends by ONS

The OSN report published on 19/09/2019 explores recent trends in the London housing market and highlights the following:

• In recent years, annual house price growth in London has been in steady decline. From a recent peak of 14.8% in March 2016, the annual rate of house price growth has fallen sharply, with three of the last five months seeing negative annual growth.  More recently, since mid-2016, we have seen a general fall in property transactions volumes in London. Both series have continued their downward trend with the rate of sales volumes growth having been negative for nine months between September 2017 and May 2018. This may be influenced by a slowdown in previous transactions, the buy-to-let market and other demand factors.

• Recent negative house price growth in London appears to be driven primarily by inner London for which annual house price growth has been consistently negative for seven months. Annual house price growth for outer London has remained positive for the whole period.

• All London boroughs had positive sales growth in March 2016 and negative sales growth in April 2016, which coincides with the introduction of a higher rate of Stamp Duty on additional properties in April 2016. The increases in sales growth in March 2016 were particularly pronounced in Kensington and Chelsea, Hammersmith and Fulham, and Richmond upon Thames.

• Central and west London properties that have recorded negative average price growth over the last year may have reached a house price level ‘from which continued high rates of growth are unsustainable’ – states OSN report.

• Across the whole period more flats have been sold each month than any other property type in London. 

• Cash purchases account for around a third of property transactions in London and have shown little variation over the period since January 2012.  The average price of a property bought as a cash purchase in July 2018 was £512,000 while the average price of a property bought with a mortgage in July 2018 was £477,000. The proportion of property sales accounted for by cash purchases ranged from around 13% in Barking and Dagenham to around 55% in Kensington and Chelsea.

• The proportion of property sales in 2017 accounted for by new-builds varies considerably between boroughs, from a high of 45% in Newham to a low of 3% in Islington.

Read the full ONS analysis here

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