For Kensington and Chelsea, read Walthamstow and Forest Gate. London’s booming housing market has created a new breed of east London property millionaire, according to a new study which reveals that more than 200 Britons a day are waking up to find their home is now worth a seven-figure sum.
Across Britain, more than 620,000 people now own a house or flat worth £1m or more, which is an increase of 75,000 on January’s total, said researchers at Zoopla, the property website. Outside London, it is east England, Yorkshire and the Humber that have seen the largest increases in million-pound properties – up 28% and 24% respectively since the start of this year.
Scotland is the only region where there are now fewer property millionaires than there were in January – which may reflect the impact that a new Scottish property tax introduced in April has had on the upper end of the market.
The list of areas that have seen the biggest increases in the numbers of million-pound properties this year is dominated by east London boroughs such as Barking and Dagenham, Newham and Waltham Forest.
Up until a few years ago, even the most enthusiastic estate agent might have struggled to describe some of these areas as “highly sought-after residential locations”. However, the ripple-out effect of surging prices in other already-expensive parts of London, plus factors such as “the Olympic effect”, have pushed property values to record highs in many once-unloved boroughs.
The top six London boroughs with the largest increases in the numbers of million-pound properties between January and December this year are all in the east of the capital, said Zoopla.
Redbridge – which includes areas such as Wanstead, Woodford and Ilford – and Waltham Forest, which includes the districts of Walthamstow and Chingford, each notched up a 56% increase over the past year, and are now home to 1,771 and 1,330 property millionaires respectively. Newham, which contains most of the Olympic Park, saw an 88% rise, from 121 to 227. Barking and Dagenham topped the table with a 288% increase. However, this reflects the finding that there are now 10 £1m properties there – up from just three at the start of the year.
Walthamstow, at the end of the Victoria line on the London Underground, is an area that has nudged into million-pound territory relatively recently – albeit only a small handful of properties in certain hotspot locations. Foxtons, an estate agent, cemented Walthamstow’s “up-and-coming” status by opening an office there in March. The company is marketing a double-fronted four-bedroom house in “Walthamstow village” for £1.35m.
The suburban area of Wanstead is, generally, pricier, with property website Rightmove listing several homes for sale at £1m-plus. Meanwhile, a five-bedroom detached period house in Forest Gate, Newham, is currently on the market for £2m. It is a grade-two listed property built in the Queen Anne style in 1878.
Daren Haysom, Foxtons’ area director for north-east London, said some of these areas had in the past been on the receiving end of “prejudice”. An area such as Stratford was almost a “swear word” until the 2012 Olympic Games, when people realised it had good parks and open spaces, “lovely” housing stock and great transport links, he added.
However, with much of London now out of the reach of many buyers, some campaigners are talking about a gentrification crisis. There are concerns about the widening gap between rich and poor in some “newly affluent” parts of London. The number of property millionaires in Barking and Dagenham may have risen sharply but at the same time, government figures issued in September show that the borough has gone from being the 20th most deprived local authority in England in 2010 to the ninth in 2015.
There was also more bad news for those hoping to buy a home soon when two leading property bodies issued a report predicting UK house prices would increase by half (50%) their current value by 2025, rising from an average of around £280,000 to £419,000.
The Housing 2025 report from the Association of Residential Letting Agents and National Association of Estate Agents claimed London house prices were expected to nearly double over the next decade, rising from a typical £515,000 to £931,000.
The report, compiled with the help of the Centre for Economics and Business Research, said that for those planning to enter the rental market in the next few years, “the news is just as bleak”: rents were predicted to increase by 27% from a current UK average of £134 per week to £171 in 2025.
Currently around 62% of the working population owns their own home, said the report, which predicted this would fall to 55% over the next 10 years.
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