News

First-Time Buyers Still Paying More Despite Falling London House Prices

London, 27 June 2019 – Falling house prices in London are failing to help out first-time buyers — who are often paying MORE to get on the housing ladder, analysis by Shariah-compliant home finance provider Gatehouse Bank reveals1.

Areas traditionally popular with those buying their first property were among the few places in the capital to see prices buck the downward trend over the past year.

Average London property values have been falling on an annual basis since March 2018, decreasing 1.92% to March 2019 — down from £472,357 to £463,283.

But in Barking and Dagenham, one of the most affordable areas in the capital, the average price paid by first-time buyers rose 2.91% — up from £276,701 to £284,751 in the same period.

This counter-intuitive trend was repeated across other areas favoured by first-time buyers. Hackney shot up 5.4%, Hillingdon saw a 0.67% up-lift, Hounslow rose 2.45%, Merton increased 3.61%, and Newham received a 4.87% boost. House prices in Bexley saw a 0.58% rise.

Authority

FTB Ave House Price March 2018

FTB Ave House Price March 2019

Change

City of London

£757,240

£880,204

16.24%

Hackney

£505,908

£533,218

5.40%

Newham

£345,093

£361,912

4.87%

Merton

£430,121

£445,648

3.61%

Barking and Dagenham

£276,701

£284,751

2.91%

Hounslow

£355,349

£364,061

2.45%

Richmond upon Thames

£515,984

£526,907

2.12%

Hillingdon

£341,746

£344,047

0.67%

Bexley

£305,426

£307,192

0.58%

Bromley

£353,025

£352,056

-0.27%

Enfield

£350,836

£349,242

-0.45%

Havering

£311,173

£307,056

-1.32%

Waltham Forest

£420,658

£414,460

-1.47%

Islington

£617,295

£606,886

-1.69%

Croydon

£310,973

£303,575

-2.38%

Sutton

£319,043

£311,276

-2.43%

Lewisham

£357,320

£348,050

-2.59%

Lambeth

£456,655

£444,730

-2.61%

Kingston upon Thames

£415,438

£403,947

-2.77%

Haringey

£491,587

£477,738

-2.82%

Ealing

£429,907

£417,061

-2.99%

Redbridge

£366,614

£354,426

-3.32%

Harrow

£398,632

£384,940

-3.43%

Wandsworth

£520,240

£500,503

-3.79%

Southwark

£456,977

£438,687

-4.00%

Tower Hamlets

£434,191

£416,772

-4.01%

Greenwich

£349,761

£335,660

-4.03%

Brent

£412,865

£395,954

-4.10%

Barnet

£449,762

£428,604

-4.70%

Hammersmith and Fulham

£643,203

£594,672

-7.55%

Camden

£730,694

£661,408

-9.48%

City of Westminster

£966,783

£830,519

-14.09%

Kensington and Chelsea

£1,217,182

£1,013,999

-16.69%

The only other parts of the capital to see prices rise for first-time buyers were Richmond upon Thames (2.12%) and the City of London (up 16.24%, likely due to low sale volumes).

In the nine boroughs to see a rise, the average price of homes bought by first-time buyers went up 4.3%2.

The biggest drop in the amount paid by first-time buyers was in Kensington and Chelsea, where the average price fell 16.69%, from £1,217,182 to £1,013,999 — a drop of more than £200,000.

Charles Haresnape, CEO of Gatehouse Bank, said:

“The trend for the London property market over the last year has been all about falling prices and most people would expect the one silver lining to be that first-time buyers would find it easier to get on the housing ladder.

“Sadly that’s not the case. It is counter-intuitive but in many areas popular with first-time buyers, the situation is actually getting worse. A young couple hoping to buy in Hackney today would have to find an extra £27,310 to purchase a property compared to a year ago.

“It could be that the shortage of affordable housing for first-time buyers is forcing up prices in areas where it is generally cheaper to get on the housing ladder. This continuing disparity means first-time buyers are experiencing a two-speed London, with prices moving in different directions as you cross borough boundaries.”

1Land Registry

2Non-weighted average