They say the streets of London are paved with gold but, when it comes to house prices, that is not a vast exaggeration given that the average price of a house in a record 41% of the capital is now at least £1m.
Rising home values mean that 113 of the capital’s 274 postcode districts now have an average house price of £1m-plus, with six new neighbourhoods joining the seven-figure club this year.
The proportion of million-pound London neighbourhoods has almost doubled in the past decade. Back in 2012 when London’s property prices began to accelerate following the financial crash, 24% of London neighbourhoods had house prices of at least £1m. Areas that made the cut then for the first time included Kentish Town, in north London, where the average house now costs £1,835,610, and Clapham, in the southwest, where houses now average £1,734,320. The high cost of property means these fringe areas are now on the verge of entering prime London territory.
When divided by Travel Zone, the average house in every part of Zone One costs at least £1m and has done so since 2017. While two of the east London locations to join the seven-figure club this year are in Zone Two – Wapping and Bethnal Green – overall the share of £1m neighbourhoods in this Travel Zone has fallen, from 81% last year to 77% now.
Indeed, the growth in new £1m-plus neighbourhoods over the past couple of years has occurred in the cheaper outer areas of Zones Three to Six, following fairly limited growth in the preceding years and driven by the pandemic-induced race for more space. Of the newly minted £1m-plus postcodes, Cricklewood, West Ealing and Acton are in Zone 3, while Northwood is in Zone 6.
In Zone Four, 16% of neighbourhoods now have houses costing an average of at least £1m, up from only 3% of areas in 2018-2020. House prices in Zone Four areas Finchley and Raynes Park passed the £1m mark for the first time last year.
Given the economic outlook, it seems unlikely that many new neighbourhoods will join the millionaire postcode club in the next 12 months given that we are not expecting much property price growth in the capital until 2024. However, the ones to watch are Harlesden, Greenwich, Tooting Bec and Brixton Hill as all have average house prices within touching distance of £1m. To enquire about properties in these areas, contact our estate agents in Balham for properties in Tooting Bec and Brixton Hill. For properties in Harlesden, contact our Kensal Rise & Queen's Park estate agents, and contact our estate agents in Greenwich for properties in Greenwich.
From 2024, we think the growth in London property prices will be led by more expensive, central areas. This likely means greater growth in the numbers of gilded £2m and even £5m neighbourhoods, rather than in new £1m postcode districts.