Properties in London are now almost 60% more costly than they were prior to the 2008 financial crisis, according to the latest data released by the Office for National Statistics on Tuesday.
While it is hardly a revelation that London property is incredibly expensive, the statistic illustrates not only the huge disparity between London and the rest of the UK — where prices are roughly 23% above their previous peak — but also just how completely unprecedented the current London property boom, which doesn’t look to be ending anytime soon, is.
Prices in the capital reached their previous peak just prior to the 2008 financial crisis, but crashed massively in response to the crisis, with demand for new properties tanking. Since the end of the GFC however, a wave of foreign investment into London, and a huge imbalance in supply and demand in the property market, have pushed prices skywards.
Despite repeated warnings over the past year or so that the London market is going to cool down, that slowdown hasn’t been forthcoming — at least away from the super luxury end of things.
Here’s the chart showing just how much more London properties now cost compared to their pre-2008 boom:
It is worth noting, as pointed out by planning firm Nathaniel Lichfield & Partners, that UK property statistics are skewed by London, so while there is a noticeable gap between the amount prices have risen in London and the rest of the UK, the real gap is even bigger.
“London’s performance skews national statistics. The average house in the UK is only 14% higher than its peak — if we take London’s booming market out of the analysis — and only 9% higher if we ignore London and the South East,” a report from the firm said.
ONS data, which is often at the lower end of the scale in terms of prices, shows that London homes now cost £552,000 on average, while the average country wide is £292,000.
On a short term basis, March’s ONS house price data showed that prices in the capital grew 13% in the 12 months up to March 2016, compared to 9% growth across the UK, up from 7.6% at the same reading in February.
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