News | Borough by Borough 2019: London Living
CBRE has launched its annual London residential research report, Borough by Borough.
London, 24 September 2019 - Global real estate advisor CBRE has launched its annual London residential research report, Borough by Borough.
Borough by Borough is the comprehensive guide to the housing market and demographics in each of London’s 33 boroughs. It also provides details of what residents can do in their free time, with leisure and lifestyle measures for each borough, including the number of shops, restaurants and the amount of open space.
This year, CBRE finds that East London boroughs are among the highest performers for both historic and potential future house price growth. In addition, demand for private rental housing, particularly in central London, contributes to positive forecasts for rental growth across London.
Jennet Siebrits, UK Head of Residential Research, CBRE, said:
“Our latest Borough by Borough report demonstrates once again the breadth of the London housing market. Residential property in London reflects the city’s diverse demographics and budgets; from properties for first-time buyers, family homes, high end properties and an expanding private rental sector.”
Mark Collins, UK Chairman of Residential, CBRE, said:
“London remains an attractive city for people from outside the UK to come to for work and study. It also draws people in from around the UK. Following a period of low growth and a dip in transaction volume, owner-occupiers and investors understand that they can find good value in London property, and that it’s still a great place to live.
“Borough by Borough gives a flavor of what’s is like to live in different parts of our capital city.
“The decision of where to live comes down to considerations of budget and connectivity, but also whether a particular area speaks to you and complements how you want to live. For instance, would I like to wake up in the trendy heart of Hackney, with a buzzing coffee shop on my doorstep, or would I prefer to browse in Marylebone Village’s excellent boutique shops? Or perhaps I am keen on running or watching rugby on weekends, so I’d want to be within striking distance of a good park and sports facilities. Knowingly or not, these lifestyle preferences inform where we decide to live.”
According to CBRE’s Borough by Borough report, in 2019 the average house price in London is £460,000, although this masks a wide range across the different boroughs. Barking and Dagenham had the lowest average house price of £297,039, while Kensington and Chelsea has the highest average house price of £1,250,926.
East London boroughs have experienced the strongest long-term house price growth in recent years and have among the lowest house prices. Leading the way is Barking & Dagenham, with 51% house price growth over 5 years, which is more than 2.5 times greater than the London figure of 19.5%. This is followed by Newham (49%), Waltham Forest (44%), Bexley (42%), Redbridge (41%) and Havering (40%).
Jennet Siebrits said:
“East London’s success is down to a happy confluence of different elements – including the maturing of Canary Wharf, the opportunities presented by derelict industrial sites, local authorities’ support for regeneration, improved infrastructure, and the stimulus provided by the 2012 Olympics. And that meant East London was primed for the emerging tech industry to grow into, and so London’s commercial centre has spread eastwards.
“Regeneration may have smoothed east London’s rough edges, but it also drew in new residents who helped embed its cool reputation – tech workers and creatives, and younger demographics drawn by the lifestyle, as well as seeking competitive house prices and rents.”
Meanwhile, in the central London boroughs of Lambeth and Southwark, house price growth over the last five years outperformed London, with 17% and 14% growth respectively. Both boroughs are south of the river, and Lambeth is the location of one of inner London’s largest regeneration projects at Vauxhall, Nine Elms and Battersea (VNEB).
Jennet Siebrits said:
“The London sales market has been cooling over the last three years, with both price growth and transactions softening. However, there are tentative signs that the trend has reached a plateau. According to the latest RICS Residential Survey, new buyer enquiries increased for the second consecutive month in July 2019. This may well translate into a rise in sales towards the end of the year.”
London house prices have increased by 19.5% over the last five years, and CBRE forecasts prices to grow by 10% over the next five years (2019-2023).
Average rents have increased by 10% in London over the last 5 five years, and CBRE forecasts this rate of growth to accelerate to 18% over the next 5 five years (2019 - 2023).
According to CBRE’s research, the London Borough of Bexley has the lowest average monthly rent for a two-bedroom property, of £1,100 per calendar month, which compares favourably against the London average of £1,900. Also in east London, the borough of Havering, where average monthly rents are £1,125, has the second lowest average rents.
Jennet Siebrits, UK Head of Residential Research, CBRE said:
“The rental market in London is buoyant. Increasing wage growth and employment growth is boosting tenant demand.
“The build to rent sector, also referred to as multifamily housing, is delivering significant numbers of new homes. There were 13,500 build to rent units under construction as at the end of the second quarter of 2019, a five-fold increase compared with five years ago.
Tenants generally enjoy a better standard of rental accommodation in professionally-managed blocks of new apartments, and that is expected to put more pressure on private landlords with older stock to make improvements to their properties and tenant services. However, even with the build to rent boom, London is still facing a housing supply shortfall. Consequently, as the supply of rental homes is not keeping up with demand, we expect average rents to rise.”
The number of private rental households in the City of London has grown by 83% over the last 10 years, and now 43% of households in the area are rental properties, the highest proportion in the capital. The district has been invigorated by the smart new bars and restaurants, boutiques, fitness studios and pop-ups, along with new housing developments and conversions. The City has the highest rents in CBRE’s study, with an average of £5,600 per month for a 2-bedroom property, reflecting luxury new stock in the area. Rental values have increased by 33% over the last five years and are forecast to grow by 20% over the next five.
Jennet Siebrits comments:
“The desire to live in the heart of the action in the City of London is part of a trend we see around the world, where there is increasing urbanisation and population growth in major cities. It means landlords and local authorities increasingly must think about city centres as places to work, socialise and live, with the onus shifting from commercial uses to a more mixed landscape."
For all the information on London living, please see Borough by Borough 2019