Build Magazine 56 Real Estate ew research from estate agency, Jackson-Stops & Staff, also shows that in 1995, 87 per cent of properties sold in London were for less than £150,000. Today the market has undergone a complete reversal with only 2 per cent of homes sold today now fetching below this price. Jackson Stops & Staff anticipates that homes sold below £120,000 will completely disappear from the market this year. Robert Butterworth, Head of Research at Jackson- Stops & Staff, comments, “our research highlights the incredible changes in the London property market over the last 20 years. Back in 1995 homes valued under £200,000 made up the majority of the market profile, but today they are an endangered species. The entire profile of the market has been flipped on its head – a seismic shift that even a betting man would not have put his money on.” London has seen a near seven-fold increase in house prices over the last 21 years, with the average price of properties sold in the Capital currently sitting at £484,700. Simple averages hide the distribution of prices however. Surprisingly, 27 per cent of properties sold last year, amounting to some 290,000 sales, were completed at under £300,000. For home buyers seeking to acquire lower priced properties in London, the choices are sharply reducing. Looking back to 1995 reveals how over the space of the year house prices below a certain value all but disappeared in London. Jackson- Stops & Staff define house prices as being “extinct” if the number of properties sold at or below this price is less than 0.005 of all properties sold in the year, (i.e. less than 1 in 200.) There are Jackson-Stops & Staff has more than a century of experience in the prime property market with 45 offices nationwide, from houses and apartments in London’s smartest districts, to country houses, farms and estates and listed buildings, from residential development and new homes sales to professional services. New data released by the firm uncovers recent trends in London real estate that signify a dramatic rise in property values, and the looming extinction of more affordable housing in the capital. London’s House Price Extinction Tracker N often one or two properties in each lower price bar but these are invariably anomalies, like a garage, and are best ignored. In 1995, when the “£10,000” London property disappeared from the market, nearly 75 per cent of properties sold were under £100,000. Now there are no properties priced at £100,000 left on the market. They died out completely in 2008. Meanwhile, in 1995, 93 per cent of properties sold were below £200,000. Presently 93 per cent of properties sold in London are above £200,000. This year the “under £120,000” property will disappear in London and Jackson-Stops & Staff estimate that in four years’ time, homes under £150,000 will disappear. Within 10 years they predict that all homes under £200,000 will be gone in London. Robert Butterworth continues, “rapid property price growth has a significant impact on an area and changes how it is perceived by both homeowners and those looking to make an investment in property. While average prices of lower value properties are currently rising at a faster pace than more expensive ones, good investments and opportunities are still out there which carry the attraction of living in the more central regions. London’s past and recent performance still drives consumer sentiment. The figures really say it all – a house bought for £198,000 in 2002 is now worth more than £550,000.” Instinctif Partners Kaylene Oliveira, Associate Partner
[email protected] Surmising their findings, Jackson-Stops uncovers that: • The average house price in London is now £484,700, having risen from £72,778 in 1995, representing a 566 per cent (6.7- fold) increase in nominal terms. London’s average house price is over twice the national average of £216,750. • Homes priced below £100,000 are now extinct, having disappeared from the market in 2008 - see table overleaf. In 1995 nearly 75 per cent of London properties sold were less than £100,000. • In 1995, 93 per cent of sold London properties were below £200,000. Now 93 per cent of properties sold in London are over £200,000. • This year houses under £120,000 will totally vanish and those valued at less than £150,000 are likely to disappear from the market by 2020. • Jackson-Stops & Staff estimates that homes sold at less than £200,000 will also vanish by 2025. • Jackson-Stops & Staff expects London house prices will remain robust over the next 12 months, with any weakness at the very top end of the market compensated by activity and price increases at the mid to lower end of the market.