A new study suggests it will be impossible to buy a home for less than £120,000 in London by the end of 2016.
It will be impossible to buy a home for less than £120,000 in London by the end of 2016 and for less than £200,000 by 2025, according to the London House Price Extinction Tracker from Jackson-Stops & Staff.
The analysis suggests that buying a home in London is becoming more and more unaffordable and suggests it will continue to beso as prices keep rising.
The average house price in London is now £484,700, having risen from £72,778 in 1995, representing a 566% increase in nominal terms and London’s average house price is over twice the national average of £216,750, the
It points out that homes priced below £100,000 in the capital are now extinct, having disappeared from the market in 2008 yet in 1995 nearly 75% of London properties sold were less than £100,000.
The research also reveals that in 1995 some 93% of sold London properties were below £200,000 but now 93% of properties sold in London are over £200,000.
It predicts that 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 while 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.
Robert Butterworth, head of research at Jackson-Stops & Staff, said: "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."
He pointed out that there are often one or two properties in each lower price bar but these are invariably anomalies, like a garage, and are best ignored, adding that 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.
Butterworth added: "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."
