House prices are dropping across London – but people are still having to leave the capital to buy
Despite this, many Londoners are still struggling to get on the property ladder in the capital, forcing them to leave the city to buy elsewhere, or remain part of the forever renters community.
Nationwide data on people who had moved house in the last five years also showed a marginally higher rate of people leaving cities for small towns or rural areas, compared to those coming into cities.
Toby Leek, NAEA Propertymark president, told The Independent: 'London remains a highly attractive and aspirational place for many people to move to, and though house price growth is slowing, many aspiring homeowners are struggling to step onto the region's housing market due to a myriad of factors.
'These include the growing disparity in house prices and wage growth, with the average home across the Greater London area costing around £680,000 and the average wage sitting at around £48,000, meaning buying a home costs over 14 times the average income.
'Also contributing to this struggle that many buyers are facing is the increased Stamp Duty thresholds from April this year, a shortage of supply triggered by slow rates of development and higher interest rates than those traditionally used to, making mortgaging a property more difficult.'
Price divide
Land registry data showing London borough house prices over the last 12 months reveals that while the city-wide trend might remain on the up, there's a clear divide between central areas and boroughs on the outskirts.
While house prices in areas like Lewisham, Redbridge and Havering are up between 8 and 9 per cent over the past year, more central boroughs such as Greenwich, Camden and Wandsworth are down between 2.4 and 4.5 per cent.
For Islington it's more than 8 per cent lower, Kensington and Chelsea is 15 per cent down and Westminster is a full 20.1 per cent below last year.
Sellers are having to accept average discounts of nearly ten per cent to the asking price, while Coutts Bank said 82 per cent of properties in prime London sold for below the asking price between January and March this year, per the Telegraph.
And that isn't always limited to those traditionally higher-end locations.
Leaving London
'It's not just wealthy buyers that are reconsidering their options. Mortgage rates may be easing but with stamp duty costs now higher, wage growth starting to slow and living costs still on the climb, affordability remains a challenge for Londoners whose finances are already constrained by sky-high rents,' Alice Haine, personal finance analyst at Bestinvest told The Independent.
' Homeowners in the capital typically see a larger proportion of their income swallowed up by mortgage payments than their counterparts elsewhere in the country. Plus, with most personal tax thresholds on hold, which results in people paying higher rates of tax as their income increases, it can make sense for people to relocate to cheaper parts of the UK to make life more affordable.
'The pandemic has radically shifted workers' perception of what a healthy work-life balance is. Rather than commuting across a city every day, people can now head into the office once a week or even once a month. It therefore makes more sense for some to live in a larger property in a quieter, cheaper part of the country than trying to squeeze a family into a one- or-two-bedroom flat.
'It seems having a higher disposable income to cover everyday bills with enough spare money to go on holiday once a year and save for the future may now be more important than proximity to the office.'
Regardless of location, Bank of England data showed that the number of mortgages approved by UK lenders for home purchases dropped again in April - a third consecutive drop of net residential mortgage approvals.
With interest rates now not expected to drop below 4 per cent until the end of this year, if at all, buyers and those looking to remortgage alike may be considering taking the plunge, having been holding off until now due to declining rates in 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
21 minutes ago
- The Independent
The Oyster cards affected by price increases
Transport for London (TfL) has increased the price of London 's Oyster cards for the first time in a decade, attributing the rises to increasing operational costs. The application fee for the 60+ London Oyster card has seen the largest increase, almost doubling from £20 to £35. Fees for the annual eligibility check and replacement 60+ photocards have also risen from £10 to £18, with increases also applied to various Zip photocards. From 7 September, the cost of new Oyster cards and Visitor Oyster cards will increase from £7 to £10. Michael Roberts, Chief Executive of London TravelWatch, criticised the increases, stating they are unwelcome news for Londoners facing the ongoing cost-of-living crisis.
Daily Mail
21 minutes ago
- Daily Mail
QUENTIN LETTS: With his drip dry suburban ways, there's something furtive about the Governor
Bank managers are often thought stodgy presences. But as Andrew Bailey demonstrated at the treasury select committee, they are crazily optimistic loan sharks. Their purpose in life is to persuade happy people to borrow money, which frequently brings misery. 'It'll be fine,' they say. Bank managers are maniacs. Outwardly Mr Bailey is unexciting. They're always the most dangerous. The sober socks, bland suit, Pooterish manner, and a retinue of six clerical mice who traipse after him with earnest haircuts and dark shoes: it is a brilliant disguise. We think, 'he'll be safe', but we'd be safer being driven home from an all-night bender by the late Ayrton Senna. Mr Bailey is governor of the Bank of England. His time in charge has so far seen the mad printing of money, blindness to inflation after lockdown and a regulatory laxness that hastened the Truss government's destruction. Yesterday he was asked if Rachel Reeves was borrowing too much. Noooo, said Mr Bailey. Everything's under control. He slipped easily into jargon mode, burbling that yield curves were steeper across the world. As he did this he narrowed his eyes a little to convey shrewd expertise. He placed his elbows on the witness table and touched the skin of his brow, quite the expert intellectual. Carry on borrowing, Chancellor. It's all going swimmingly. That was his siren song. Dame Meg Hillier (Lab), chairman of the committee, was surprised. 'You sound unconcerned,' honked Mother-Goose Meg. Mr Bailey, suppressing just a hint of indigestion: 'I'm not unconcerned. It's reflective of conditions. There is an uncertainty in geopolitics, I'd say.' Dame Meg boggled a bit at his calm tone. We were talking here about trillions of pounds and an interest bill that could bankrupt us. Mr Bailey soothed Dame Meg with a not-quite convincing smile. He noted that the market capitalisation of a single US firm is now greater than Britain's gross domestic product. Was that meant to be reassuring? Unlike his talcum-powdered predecessor Mark Carney this Bank governor is not a magnetic figure. When he enters a room, people do not hush. When Mr Carney shimmered down a corridor, you could almost hear Sade's 'Smooth Operator'. Mr Bailey, with his crinkly hairdo and drip-dry, suburban ways, lacks charisma. He fiddles with his chin and neck when talking. His fingers twiddle with a slender ballpoint pen. There's something not quite right about him. Something flawed. Furtive. When Ms Reeves first started to meet him, she possibly suspected that she was the senior partner in the relationship. Now, as she looks at our economy going down the plughole, she must wish she had never listened to his burbling reassurances. He was accompanied by two external members of the Bank's financial policy committee. Carolyn Wilkins, a Canadian policy wonk, was largely inaudible. Prof Randall Kroszner, known as 'Randy', sat on the very edge of his chair, his spine ramrod straight. Randy was Norman R. Bobins professor of economics at Chicago university, a director of the George J. Stigler Center for the Study of the Economy and the John M. Olin visiting fellow of law at Chicago law school. Randy turns left on aeroplanes. We possibly need to keep Rachel Reeves away from such people. It being the last day of term, Westminster was pretty empty. The education committee was holding an inquiry about truancy. Jolly bad luck. It meant most of them had to turn up. And in the Commons chamber Wes Streeting took health questions. Wes is already quite bronzé. Not a fleck of grey taints his inky, modishly ridged fringe. Add a rich, blue suit and just a hint of tummy. During longueurs he effortlessly attended to his mobile telephone. He paid handsome tribute to his Tory shadow, Edward Argar, who is retiring from the front bench. And he relished talking about the resident doctors' strike, which we must all hope he wins. The Starmer Government has had a hellish first year but little Wes is loving life.
Telegraph
22 minutes ago
- Telegraph
Treasury boss gets £20k bonus as growth slumps and taxes soar
The Treasury's top civil servant has been handed a bonus of up to £20,000, despite Britain's stalling growth and soaring taxes. James Bowler, the most senior official managing the UK's economy, received the uplift last year on top of a £10,000 pay rise and £5,000 pension boost, taking his total remuneration to roughly £350,000. Jessica Glover, the Treasury's director of growth and productivity, was also handed a bonus of up to £15,000 on top of a salary rise of roughly £10,000, taking her total pay including pensions to around £280,000. It comes as Britain braces for a growth slump and unemployment hits its highest rate since the pandemic in the wake of Rachel Reeves ' tax raid on businesses. Critics said the Treasury should not be rewarding 'bureaucrats' presiding over an economy that was 'performing atrociously' and warned taxpayers would be 'gobsmacked' by the revelations. The pay rises for Mr Bowler, who took on the top Treasury job in 2022, and Ms Glover, who was appointed to her role in 2023, were revealed in the department's annual accounts for 2024-25. They showed that Mr Bowler received a total salary of between £195,000 and £200,000 last year, up from £185,000-£190,000 in 2023-24. He was also handed a bonus of between £15,000 and £20,000, which he did not receive last year, and pension benefits totalling £133,000, taking his total remuneration to between £345,000 and £350,000. Ms Glover received a salary of £145,000-£150,000 last year, up from a full-time equivalent of £135,000-£140,000 the year before, as well as a bonus of £10,000-£15,000 and pension benefits of £117,000. It comes just weeks after the Governor of the Bank of England poured cold water on the Chancellor's claim that Britain's economy has turned a corner, warning that growth is slowing as high taxes bite. Official figures show GDP grew faster than expected in the three months of the year, but things are expected to slow down in the second quarter. The number of people in jobs has also slumped at the fastest rate since the pandemic in the wake of Ms Reeves' tax raid on businesses at last year's Budget. Meanwhile, experts have warned that Britain has suffered an 'almost unprecedented' plunge in productivity over the past five years in another setback for the Chancellor's growth ambitions. Richard Tice, the deputy leader of Reform UK, told The Telegraph: 'The Treasury seem confused. Performance-related bonuses are for when things get better not worse. 'Perhaps their failure to grasp this simple concept is why the country is going bust if they are in charge of our finances?' Darwin Friend, the head of research at the TaxPayers' Alliance, said: 'It should be a source of some embarrassment for the Treasury that they're handing out pay rises and bonuses to senior staff. 'The UK's economy has been performing atrociously over the past year, and while the Chancellor is the primary person to blame taxpayers will still be gobsmacked that her bureaucrats are seeing their pay packets boosted. 'The Treasury should be strictly linking the pay of all staff to economic performance from now on.' Mr Bowler was unveiled as the Treasury's permanent secretary during Liz Truss' short premiership in 2022, taking over from Sir Tom Scholar. He has spent much of his career in the department, with past briefs including director general for public spending and director general for tax and welfare. He also served as principal private secretary to both Lord Darling and Gordon Brown when they were chancellor, as well as more recently playing a senior role in the Covid taskforce. He was tipped to become the Cabinet secretary, the most senior civil servant in the country, when Ms Truss took over, but Lord Case, who has since stepped down, was kept in post instead. A Government spokesman said: 'This pay increase is in line with those of permanent secretaries across Whitehall. 'Like all others, it was set for 2024-25 in line with the recommendations of the independent Senior Salaries Review Body - with a robust framework in place to assess pay and performance. 'Decisions this Government has taken to restore economic stability have seen interest rates cut four times, a pay rise for three million workers, 380,000 jobs created and a record £120 billion in private investment coming into the UK in the past year, while the UK was also the fastest growing economy in the G7 in Q1 2025.'
