Urban chic or leafy charm? Inner city rentals catch up with affluent areas

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Photo: © Paulmaguire | Dreamstime.com

Hackney or Richmond? Brent or Fulham? Where would you prefer to rent a property? There’s now nothing in the price difference to help you decide.

Monthly rents are over the £1,200 mark in a number of historically poorer boroughs that are increasingly fashionable and gentrified, bringing them into line with the traditionally affluent areas.

Using data from the Valuation Office Agency, a government advisory body on property, Urbs looked at median prices to eliminate the effect of the high and low extremes.   The median monthly rental cost in Brent is £1,300, as it is in Hammersmith and Fulham. It’s £1,257 for a slice of Hackney’s urban chic, compared to £1,295 for leafy Richmond.

Median rent

The highest rates are in the central areas with the median rent in the City of London now heading for £2,000. Westminster and Camden are close behind.

All but 13 of the 32 boroughs have a median monthly rental of £1,000 or more. The outer boroughs of Sutton and Hillingdon offer better value but only Havering has a median monthly rental price below £800.

London continues to be by far the most expensive place to rent a property in the country.

Median rental national

The median monthly rental price across London is currently £1,350, a 3% increase year-on-year and double that of all regions of the UK except the South East.

 

Source data

See also:

Rents rise by 31% in 10 years

Landlords reclaim record number of rented homes

 

Help to Buy offers little help for those seeking a home in London

terrace on hil-2The government’s flagship Help to Buy scheme has delivered little benefit to prospective home-owners in London. 95% of the take-up has been outside the capital. Of the 93,000 loans and mortgage guarantees completed only 5,000 have gone to Londoners. In a number of boroughs no Help to Buy loans have been taken out at all.

The Help to Buy scheme operates in two main ways. The Equity Loan scheme was introduced in April 2013. The government lends a buyer up to 20% of the price of a property if they have saved a 5% deposit, leaving them to get a mortgage for the remaining 75%. In October 2013 a second method was introduced called Mortgage Guarantee. Lenders pay the government to guarantee a mortgage, giving them the confidence to offer higher loan-to-income ratios on mortgages up to 95%

Data from the Department for Communities and Local Government shows that up to the end of March this year 47,000 equity loans had been made to the tune of £1.99 billion. Just 2,571 of those loans were in London. The number in the boroughs of Camden, Haringey, Kensington and Chelsea, Westminster and the City of London – zero.

Data for the Mortgage Guarantee scheme shows 46,800 completions, 2,517 in London.   The biggest take-up was in Croydon with 240, but in the central areas of City of London, Westminster, Camden and Kensington and Chelsea there was a total of just 19.

Help to Buy

The average price of a property supported by the Mortgage Guarantee scheme was £155,000. The average house price in London according to data from the Office for National Statistics is currently £498,000. Three quarters of mortgage guarantees go to first-time buyers. But the average first time property price in London is £387,000 according to ONS.

The high level of London property prices mean that even when a lender is offering a 95% mortgage at a multiple of 4.5 times earnings under the scheme a borrower needs a substantial income to get on the property ladder. This affordability problem, previously reported by Urbs, is reflected in the data on borrowers. The average income for borrowers using the Mortgage Guarantee scheme across England was £46,673. The average income for the small number on the scheme in London was £73,966.

Source data

Help to Buy Mortgage Guarantees data

Help to Buy Equity Loan data

 

See also:

London house prices more than 100% higher than rest of UK

House price rises fuel affordability crisis for Londoners

More homes packed into built up inner city as growth stalls in outer areas

crowded block of flatsLondon’s population continues to grow but housing development to provide people with a place to live has become increasingly focused on central areas in the past 15 years.

Data from the Department for Communities and Local Government shows that the growth in the number of homes this century has been 10% across England and 11% across London as a whole. But the figure for London disguises a stark difference between inner and outer boroughs. There has been a 37% increase in the number of homes in Tower Hamlets since 2001 and a 20% increase in Islington. But in the same period the growth rate in dwellings in 16 outer boroughs has been in single figures.

Housing growth

This pattern of growth is a reversal of what happened through most of the 20th century when more than half of the new housing stock was provided in the outer boroughs.

The consequence is that built-up areas of inner London are becoming more densely packed. Housing density is measured in dwellings per hectare. The average for England as a whole is 1.8. The average rate for London is 21.5. For Inner London it is more than double that again at 44.6. And for Kensington and Chelsea, the borough with London’s highest, it is 69.1.

As the map shows, Kensington and Chelsea has seen just 2% growth in homes sine 2001 due to a lack of brownfield sites. The fastest growing borough in terms of housing, Tower Hamlets, has seen dwelling density rise from 37.2 homes per hectare in 2001 to over 50 today.

In comparison, the dwellings per hectare rate in Havering is 8.7, in Hillingdon it is 9.1, and in Bromley 9.2. If Havering had the same level of housing density as Kensington and Chelsea it would have 800,000 homes, not 100,000.

Source data

See also:

Booming population will struggle to find a place to live

Crowded London’s most crowded place is Islington

 

 

House price rises fuel affordability crisis for Londoners

© Photographerlondon | Dreamstime.com

Photo: © Photographerlondon | Dreamstime.com

House price increases in London continue to outpace the rest of the UK. Latest data from the Land Registry shows that prices rose by 10.9% in the year to April and by 2.3% in that month alone.

In some parts of London rises are even higher. Over 12 months prices went up in Newham by 17.2%, 16.3% in Enfield and 16% in Bromley and Harrow.

While estate agents or anyone selling up and leaving the capital may be rubbing their hands the rises add to the huge problem of affordability of homes for people in London.

Urbs has looked at the data on the ratio of house prices to earnings. Using figures from the Land Registry and the Annual Survey of Hours and Earnings the government produces an index of housing affordability. The house price to earnings ratio for England is 7.1. In London it is 57% higher at 11.1.

Home affordabilty chart

The index measures the median price of a home against the median level of earnings. (Median, for those not familiar with the term, is the midpoint in a set of numbers and is different from the average).

Every London borough is above the level for England as a whole, and there are some wide variations across the capital. The boroughs seeing the greatest house price inflation in this month’s Land Registry figures – Newham and Enfield – are at the lower end of the index. The eastern boroughs of Barking and Dagenham, Havering and Bexley have the lowest level in London.

Home affordabilty map

The ratio for Kensington and Chelsea is more than twice the London level and nearly 4 times the national rate, underlining how property prices in the borough are out of line with the income of the majority of people who live there. The ratio is also high in central areas of Westminster, City and Camden, and in Hammersmith and Fulham in the west.

Land Registry data   Housing Affordability Index data

See also:

Booming population will struggle to find a place to live

London house prices more than 100% higher than rest of UK

Rents rise by 31% in 10 years

Tower Hamlets leads the way for London’s greener homes

Modern flats

London has a bigger proportion of  energy efficient homes than the rest of England, and Tower Hamlets is the leading borough with 3 times the national average for the top green rating.

Whenever a home is built, sold or let it requires a Domestic Energy Performance Certificate that rates it from A to G for its level of energy efficiency.  11.2% of homes are rated as A or B in London compared to 8.8% for England. For A, B and C ratings London is ahead again – 41% compared to 36%.

Urbs looked at all the certificates on the local authority registers from 2008 to the end of the most recent quarter (Q2 2015). As our borough map reveals there are some wide variations in housing energy efficiency, likely related to the nature of the housing stock.

energy efficient homes

27% of the homes in Tower Hamlets are in the A/B category compared to just 5% in Kensington and Chelsea. Tower Hamlets includes the Canary Wharf and Limehouse areas that have seen a huge expansion in new build houses and flats that are more energy efficient than older homes.

Source data

See also

London house prices more than 100% higher than rest of UK

Booming population will struggle to find a place to live

roofer colour

London’s booming population accounted for nearly half the growth in people in the country last year. But London’s share of new homes in England was just 17%.

Data from the Department of Communities and Local Government shows that out of 136,610 news homes 23,580 were in London. The Mayor, Boris Johnson has identified the housing shortage as an “epic challenge” for London. In his Homes for London housing strategy document last year he said that London needed 42,000 new homes a year for the next 20 years.

In launching her bid to run for Mayor this week the former Labour MP, Tessa Jowell, suggested a new agency that she described as a Transport for London for housing to help tackle the housing shortage.

The lack of homes pushes up property prices and rents, as documented by Urbs, making it far more difficult for people to find affordable housing.

An examination of borough level data shows that the majority of new homes are being built in central areas. Newham leads the way with nearly 2000 new homes. In Bromley, one of London’s largest boroughs, it is just 150.

new homes map

The imbalance between inner and outer London in the provision of new homes has developed since 2000. Throughout the 20th century most new homes were developed in outer London. In recent years the contribution of outer London has fallen below 50%.

Source data

See also:

London house prices more than 100% higher than rest of UK

Rents rise by 31% in 10 years

London drives UK population growth

London house prices more than 100% higher than rest of UK

Photo © Thinglass | Dreamstime.com

Photo: © Thinglass | Dreamstime.com

Homebuyers in London are paying a premium of more than 100% to buy a home in the capital compared with the average price in the rest of the UK.

Figures for the year to March from the Office for National Statistics show that the average cost of a house in London was £498,000. The average price in the rest of the UK is less than half that at £236,000.  The cheapest place to buy a home in the UK remains Northern Ireland where the average price is £145,000.

The gap between London and the rest of the country has widened in the past 10 years.  In 2005 the price difference on the average price was 50% or about £100,000.  The figures peaked in the middle of last year with a difference of 120%. The March figures show that average prices are going up again for the first time in 6 months after slipping back from a high in the August 2014.

House price premium

The London premium is a little less pronounced for first time buyers.  The average cost of a first home in the capital is £387,000 compared to £206,000 elsewhere in the UK.

The data from the ONS covers the period before the electon campaign.  Numbers released in the coming months will reveal whether the prospect of a so-called mansion tax proposed by Labour and the Liberal Democrats had a dampening effect on the London property market.

Source date

See also

Rents rise by 31% in 10 years

 

Rents rise by 31% in 10 years

rented houseThe cost of renting a home from a private landlord has gone up by 31% in the past 10 years in London.  That is twice the rate of increase seen in the rest of England.

The figures are revealed in a newly creating Index of Private Housing Rental Prices, produced by the National Office for Statistics.  It shows that rents went up by 3% in the first quarter of 2015 compared to the same period last year. It was 1% for the rest of England.  London rents have gone up by at least 3% every year since 2011.  The annual rise reached a peak of 5% in 2012.

Private rental inflation

The only fall in the last 10 years, both London and nationally, was in 2010. The rate of rent rises was broadly in line for London and the rest of England 10 years ago, but a gap has opened since 2011.

Renting is more expensive in the capital for all sizes of homes.  The most recent data from the Valuation Office Agency, which advises the government on property values, shows the median rate for a 2-bedroom property is £580 across England, but £1,382 in London.  A 1-bedroom flat in London costs more per month than a 4-bedroom property elsewhere in England.

London Rest of England
1 Bedroom £1,148 £520
2 Bedroom £1,382 £580
3 Bedroom £1,668 £675
4 Bedroom £2,500 £1,100

Private rental median prices September 2014: Valuation Office Agency

Rising rental costs are having an impact on the number of tenants losing their homes in London, which is at an all time high, as reported by Urbs.