London residential outlook
In its more than 2,000 years of history, from its beginnings as a small Roman Empire town called Londinium covering only a couple of hundred hectares, the modern city that we know today as London now covers an area over 600 square miles and has grown to become one of the most significant financial and cultural capitals of the world. To give some context to the city’s size, the combined areas of the leading UK cities of Birmingham, Leeds, Liverpool, Manchester, Nottingham and Newcastle could fit within the border of Metropolitan London with room for a couple more.
The city is home to more than 8.5 million residents with the recent census reporting that 37% of whom were born overseas, bringing to London a diverse range of peoples, cultures and over 300 languages spoken in everyday life. This diversity contributes to the vibrancy of the city strengthening its leading position in the arts, finance and commerce, education, entertainment, professional services, healthcare and tourism. London’s cosmopolitan nature is one of its strengths in attracting workers and investors from around the world, thus making it a favourite for property investors.
Affected by the global financial crisis, the housing market was particularly lethargic for some time, but in the past couple of years has been performing strongly with latest CBRE data showing rents up by 6.1 percent over the past year with prices up 11 percent in the same period.
London is made up of 33 boroughs, often split between Inner and Outer London. Inner London comprises 14 of the total with a population of 3.2 million. The remaining 19 boroughs make up Outer London. According to CBRE, the average London house price is £458,283.
There is a significant disparity in earnings between residents in both Inner and Outer London with the most affluent residing in the Inner London boroughs with average earnings more than four times of their neighbours in some Outer London boroughs. This difference in earnings is reflected in consistently higher house prices in Inner London with an average home costing around £659,000 representing a 73 percent premium over the £385,145 value of an Outer London home.
The limited availability mixed with the higher prices in Inner London have shown considerable price growth in the past several years. An average house in Inner London has more than doubled in value over the last decade out-pacing Outer London boroughs by 3.6 percent per annum.
There is clear potential for growth in both Inner and Outer London boroughs.
Reference: CBRE ResearchContact Us Now