With the East London areas of Dalston and Shoreditch taking the honours of the 2016 property hotspots, some experts are predicting the accolade for 2017, will be won by the south London areas of Streatham and Peckham.
“A price surge of some 60% in five years won the hotspot prize for Dalston in 2016,” said London Bridge estate agent, Williams lynch. “And, while that figure might not be achieved again, it’s easy to see why south London is expected to be next in line for the hotspot crown in 2017.”
Streatham and Peckham are expected to see an increase in activity and price, as people continue to flock to the south London favourites of Dulwich and Brixton, only to find they’re priced out of those well-established popular London destinations. It’s a common occurrence – not just in London but globally. When one region becomes too expensive, people move to the next best area, gentrification begins, sending the popularity and average prices of those new areas higher too.
However, when people fall out of love with an area and prices fall, the same can happen to surrounding regions too. But, with affordable property in London still scarce, despite more apartment building during 2016 and planned for 2017 and beyond, a decline in prices of property regular working people and Buy-to-Let investors (BTL) can afford, isn’t something that’s expected to happen in the capital, any time soon.
“London remains an incredibly popular city, despite the fears unleashed by Brexit,” said Denhan Guaranteed Rent. “Unfortunately, the same can’t be said for prime London properties which have been hit hard by more cautious overseas investors.”
The latest survey from Knight Frank suggests that is the case. According to its data, the average price of prime property in Chelsea and Hyde Park was 13.5% lower in December this year compared with a year earlier. That’s a huge drop by any standards, but when you’re looking at prices in the millions, you’re talking about numbers a lot higher than most people are used to.
While drops of that level are limited to the two areas mentioned, there was no sign of a price rise anywhere else in the Prime Central London region. The City & fringe region performed the best with no change in prices between December 2016 and the same month in 2015. However, Kensington property prices were calculated to be 11.3% lower, a drop of 9.9% in prime house prices was reported on the Riverside of London, with a fall of 9.7% in Notting Hill also recorded by the international property management firm.
These falls are in stark contrast to the figures being reported for the UK as a whole. According to online estate agency Rightmove, the average asking price for property advertised on its website was 3.4% higher in December 2016 than 12 months earlier.
“The effect of Brexit on overseas investors in London property is the clear culprit behind the steep drops being reported by Knight Frank,” said Proskips. “Given there’s no end in sight to the current level of political and economic uncertainty, how long this assault on Prime London property values will go on for, is anyone’s guess.”