London buyers to ‘fall by the wayside’
Based on land registry data which compared 2013 prices to those in 2000, Faulkner some areas of London are growing at rapid, arguably unstainable rates.
House prices in Hackney for instance have risen annually by a staggering 19%, while Waltham Forest has seen an 18% annual rate.
Faulkner said: “We’ve got six years of frustrated first-time buyers out there, so demand will probably remain as high as it is now for another year.
“Then many of these ‘would be’ first-time buyers may end up being ‘priced out’ of the area, so demand drops.
“So I think the buyers themselves will start falling by the wayside as ‘pent up’ demand softens. More people will then have the confidence to sell up, so I hope that supply and demand will start to match a little better – meaning price rises go back to their ‘norms’ or even lower.”
Other increasingly expensive areas are Wandsworth and Lambeth, where average annual prices increased by 17% and 16%.
Hammersmith, Fulham and Lewisham are running at just over their annual averages of 14% and 13%, averaging at 15% in 2014.
Faulkner added: “It doesn’t necessarily mean these rises are in ‘bubble’ territory though.
“Take Hackney for example. Over the last six years, prices have grown by 36% since the last market high in 2007/8. Take the annual average over the six years, and this means prices grew at 6% versus their norm of 19%.
“So to some extent, property prices in Hackney are ‘still good value’. Not that anyone trying to buy there on a limited budget would think so.”
She located the three bargain areas in London as Newham, Bexley and Barking and Dagenham, where in 2013 compared to 2012 prices rose by 4%, 7.5% and 10% respectively.