According to Benham and Reeves, London is still on property investment pole position since the recession despite continued Brexit uncertainty.
Benham and Reeves reviewed the UK property market since the end of the Great Recession and how it has performed until now despite many predicting a second market crash in the wake of the EU Referendum. Since the end of the recession in Q2 of 2009, house prices across the UK have increased by 45%, up from £159,561 to £230,630 now.
While Northern Ireland remains the only place still feeling the brunt of the economic downturn, every other area of the UK has seen positive growth. But this growth is highest in London where house prices have increased by 86% from their slump of £253,596 post-recession, now over £470,000 on average.
Despite the high cost of entering the property market in the capital, this growth has been driven by London’s inner boroughs with price up 94% during this time period, compared to 88% across outer London.
Even though London’s high asking prices have driven many buyers to look beyond the capital to the surrounding regions, commuter belt house price growth has also trailed London since the downturn, increasing by 72% – 14% less than the capital.
Marc von Grundherr, Director of Benham and Reeves, stated: “Much has been made about the demise of London since the EU Referendum and the resulting slowdown in house price growth, attributed largely to a withdrawal of foreign interest and investment. However, London remains the pillar of the UK property market and the ultimate jewel in the crown for both native and foreign investors. In fact, the number of EU residents buying in London alone is up from 10% in 2015 to 14% in 2018.
While Brexit may have dampened current appetites to an extent, the capital has endured far worse and although a momentary slow in price growth is inconvenient, it certainly isn’t the same scenario as the economic downturn.
London homeowners emerged from the recession with the value of their property significantly lower than it was previously but in the decade since, house price growth has been very fruitful, and London has remained ahead of the rest of the UK.
Those finding themselves in a Brexit-based limbo with regards to buying should rest assured that when the capital does resume business after a brief political respite, its market pedigree will help ensure continued price growth. Our previous research highlighted that the average first-time buyer house price could hit £4.5m in the capital based on previous house price trends, so there is still plenty of growth potential within the current market landscape.”