Kissing goodbye to the bright lights

There are two reasons for the new resurgence of the suburbs, one of the strongest trends of the summer of 2020. Lockdown has been much more tolerable in a large-ish house with a garden. Moreover, for the moment, such homes appear relatively good value to the inhabitants of inner-city properties that have only a balcony and a tiny kitchen, far from ideal while restaurants are closed.

This price differential may not last, however, given the increased interest in leafy locations. Since April, 34% of the applicants who registered to a buy a home in such ‘super-burb’ areas as Hampstead, Richmond or Wimbledon are currently living in the middle of town. During the same period last year, 27% of such applicants were inner-city types. Such demand for a move to the suburbs was last seen in 2016, when many homeowners were also cashing in their Kensington and Chelsea gains to experience suburban living.

The burgeoning love affair with the suburbs reflects the differing pace in house prices across parts of the capital in 2019 and early 2020. Up until June 2019, prices in inner London were falling faster than those in outer London. By September, however, inner London was recovering. During the second half of 2019, prime central London prices rose by an average of 1.3%. Growth in the elite neighbourhoods was 4%.

It was a different story in outer London where prices edged upwards by 0.9% during the second half of 2019. In the super-burbs, the increase was just 0.4%. This was the weakest growth in these locations since 2008, at the start of the global financial crisis. Outer London did not revive until February 2020, as the ONS house price index highlights.

Price performance in 2019 may be a guide to the places that are perceived to represent the best value now. London SW14 - which takes in Mortlake and East Sheen - was at the bottom of the super-burb league, with prices down by 8%. Nearby London TW1 – which encompasses Twickenham, St Margarets and Strawberry Hill - was the leader, rising by 8%. Among the mainstream suburbs, London RM2, the area outside Romford took the crown with a 7% increase, indicating househunters were looking east for bargains. London TW11, that is Teddington, was at the bottom with a 9% decline. The disparity between the fortunes of Mortlake and and St Margarets will be puzzling to those residents that know and love these places. But it may be better to focus on another key statistic. The average price in the super-burbs is 57% above its level of 2008, showing that the suburbs never really go out of style.

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Of our Summer 2020 Market Insight