Charting the extinction of house price bands in London

New data reveals the extinction of different house price brackets available to buy in London over the last two decades and predicts that you will no longer be able to buy a home in the capital for £300,000 by 2040.

The London property market has gone through a complete reversal over the last 21 years. At that point 93% of homes were sold for less than £200,000, conversely, now 93% of properties sold in London are sold for more than £200,000, a price bracket that is expected to become extinct by 2025.

London’s house price extinction tracker from Jackson-Stops & Staff shows that buying even the smallest London home for £120,000 or less will be impossible by the end of this year. Currently just a handful of studio apartments are available in this price bracket, on the eastern and southern edges of the capital, available at a price that equates to around 3.3 times the average pay of £36,258.

Robert Butterworth, head of research at Jackson-Stops & Staff, says: “Our research highlights the incredible changes in the London property market over the last 20 years. Back in 1995 homes valued under £200,000 made up the majority of the market profile, but today they are an endangered species. The entire profile of the market has been flipped on its head – a seismic shift that even a betting man would not have put his money on.”

Homes that cost £150,000 or less are scheduled to disappear from the market by 2020.

The research found that the average house in London now costs £484,700, up from £72,778 in 1995, a massive 6.7 fold increase of 566%. This means the average property price in London is more than double the rest of the UK’s average of £216,750.

Homes that cost less than £100,000 in London became extinct in 2008, yet just 13 years earlier, in 1995, almost 75% of property in the capital was sold for less than £100,000, 87% of homes in London were sold for less than £150,000 and 93% of homes were sold for less than £200,000.

However, there are still a significant number of homes available at what could be considered as ‘affordable’ for the capital. 27% of properties sold in London in 2015 were sold for less than £300,000, amounting to 290,000 sales, however, the choice for lower priced properties in London is being sharply reduced.

Jackson-Stops & Staff expects London house prices will remain strong over the next year, with any weakness at the very top end of the market compensated by activity and price increases at the mid to lower end of the market.

“While average prices of lower value properties are currently rising at a faster pace than more expensive ones, good investments and opportunities are still out there which carry the attraction of living in the more central regions. London’s past and recent performance still drives consumer sentiment. The figures really say it all – a house bought for £198,000 in 2002 is now worth more than £550,000,” added Robert Butterworth.