London home prices hit new high

While its good news for homeowners, it likely means fewer people an afford a home

National Weekend Edition /
Jan.January 23, 2021 12:00 PM
The average price of a London home rose above 500,000 pounds, or roughly $685,000, for the first time. (Getty)
The average price of a London home rose above 500,000 pounds, or roughly $685,000, for the first time. (Getty)

London home prices just keep getting higher.

The average price of a home in the city rose nearly 10 percent between November 2019 and November 2020 to about 514,000 pounds, or just over $700,000, according to Bloomberg News. That figure is based on data from the British government.

There are a number of elements affecting values, including a surge in demand following lockdowns in the spring and a tax cut on home sales that can be worth as much as 15,000 pounds.

The luxury market in particular slowed immensely in the first half of 2020, with 68 percent fewer deals in the first six months of the year compared to the same period a year earlier. Pricing, however, stayed high.

While the gains recorded in November are good news for homeowners, it also means fewer people can likely afford to buy at all. The average home price in the city is twice that of the national average, according to the publication.

Even though some Londoners have purchased homes outside the metro area — a post-lockdown trend seen in many big cities — prices in inner London rose more sharply than outer boroughs.

The Office of National Statistics said that could be because buyers want to take advantage of tax cuts on pricey homes, as well as demand from investors.

Demand in inner London could remain high through the spring ahead of a property tax increase set to take effect in April. A sales tax deduction for overseas buyers recently expired and some retailers are concerned that could discourage foreign shoppers from coming to the U.K. [Bloomberg] — Dennis Lynch


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