Buyers priced out of London’s toniest neighborhoods turned the city’s outer boroughs into hotspots in recent years. But now it seems prices are overheated there, too.
There are a growing number of price cuts on those neighborhoods, Bloomberg reported. “Now that prices in those places are becoming out of reach they are just giving up altogether on the idea of buying,” said Paula Higgins, CEO of consumer group HomeOwners Alliance.
Overall, London property values skyrocketed 82 percent over the past 10 years, outpacing wage growth and pushing buyers to new neighborhoods.
In Redbridge — 40 minutes away from Liverpool Street station — values dropped 30.2 percent in April, according to real estate listings website Zoopla. Tower Hamlets — which includes London’s traditional East End — saw prices rise 74 percent over 10 years but asking prices dropped by 28.5 percent, or $53,133, last month.
Analysts estimate prices in London will be flat for the first time since 2019, with low interest rates limiting the impact of Brexit. But that’s a good thing, since the average price-to-earnings ratio for first-time home buyers hit a record 10.1 last year. [Bloomberg] — E.B. Solomont