House prices have now hit at least £500,000 in two-thirds of London areas, according to new research from Savills.
In 2019, nearly half of all wards in the capital had an average house price of less than half a million pounds. But by 2021, this figure had shrunk by 12 per cent to just 36 per cent, making London even less affordable for those with smaller budgets.
The city saw a noticeable rise in suburban and semi-surburban areas breaching the £500k threshold last year, with eight wards breaking through in Waltham Forest, seven in Croydon and a further five in Bromley, Haringey and Harrow.
Lucian Cook, head of residential research at Savills, said: “We saw significant momentum to move throughout the pandemic, born from a desire for more space and spurred on by the government’s stamp duty holiday.
“For some Londoners, the search for more space to work and home school children meant moving out of more central locations to areas of the capital where they could get more for their money.
“But with stock unable to keep up with a surge in demand, prices started to rise quickly in these family-friendly suburban locations.”
Of the 232 London areas that are yet to hit the £500k threshold, a quarter are just £50,000 away from doing so, meaning spending in excess of half a million pounds on property will soon become the norm across the capital.
“Now, with the back to work movement in full force, we are seeing a rebalancing back in favour of London,” said Cook.
“However, four successive interest rate rises, coupled with the cost of living crisis, are likely to curtail the pace of the expansion of the £500k neighbourhood.”
In more depressing news for London’s first-time buyers, the amount of space that half a million pounds can buy you in the capital has also shrunk by two per cent over the last five years.
It now stands at 869 sq ft, compared to 2,017 sq ft in the North East.
That said, £500,000 actually gets you 21 per cent more space in Kensington and Chelsea today than it did five years ago, up to 495 sq ft.