Central London prices top the charts
Since the liberalisation of planning laws in 1987, the total value of homes in Hackney has risen by 864% – the fastest of any London borough.
This is followed by Tower Hamlets and Southwark, with increases of 684% and 668% respectively, since the same year which also saw the opening of City Airport and the Docklands Light Railway.
Beaten into fourth place, Kensington & Chelsea has seen its residential property increase in value by just 661% since 1987.
These gains compare with the whole of Greater London, with 453% growth in gross property value over the same period.
The value of all residential property in Greater London stands at £1.51 trillion, as of June 2014. This compares to just £273bn in 1987. Moreover, Stirling Ackroyd forecast the value of London property is set to reach £2.01 trillion by mid-2017.
Andrew Bridges, managing director of Stirling Ackroyd, said: “Since the reforms and investment that started almost 30 years ago, London has rebuilt its place at the centre of the financial, cultural and technological worlds.
“At the time, the 1987 Town and Country Planning Order hardly seemed revolutionary – but this apparently dry document has proved profoundly effective.
“Hackney Council embraced the liberalisation of changes of use with particular gusto, at first through a desperate need for income, and later in a more organised way as the benefits became clear. And that is how Hackney – an unlikely candidate at the time – has led the London property market.
“Now, across London, the City of old has gone the way of the bowler hat – and our capital has developed a buzz from its under-loved corners.
“Just as a potent economic force is sweeping away old-fashioned views about particular boroughs, this is hand in hand with a more subtle, cultural shift. Londoners are increasingly looking forwards, turning their backs on the decline that dominated much of the twentieth century.”
In absolute terms, residential property in Hackney was worth just £6.0bn in 1987, rising to £57.8bn as of June 2014, and set to reach £80bn by mid-2017 according to Stirling Ackroyd forecasts.
Similarly the value of all homes in Tower Hamlets was £6.2bn in 1987, £48.5bn in 2014, and is set to reach £71bn by 2017.
By contrast, residential property in Kensington & Chelsea was already extremely valuable in 1987, worth a total of £13.4bn, rising to £102.1bn in June 2014 and potentially reaching £138bn by 2017. Meanwhile, Westminster remains the most valuable borough in absolute terms, with gross housing wealth of £102.7 billion.
Bridges said: “Old hotspots like Kensington or Westminster remain enormously valuable. But now London is looking east. As the capital’s economic and cultural heart grows outwards and eastwards, the City fringes are demonstrating the greatest dynamism.
“Today’s best opportunities exist because of an intricate pattern of new working and living spaces, which only a flexible approach to property uses can allow.
“Development sites still exist in great numbers around the City of London, and are allowing a growing stock of all types of property.
“What matters most for successful neighbourhoods is a willingness to grasp new opportunities. Investment in infrastructure is needed along the way, as we’ve seen with the DLR and the London Overground.
“But above all, planning rules that embrace change have been the biggest factor in the creation of new ideas and new wealth.”