Docklands News

While London is experiencing a demographic shift, with its average age rising from just under 34 years in 2001 to 36 years in 2022, the capital's soaring house prices have made homeownership increasingly unattainable. Analysis by the Centre for Cities shows that many younger residents are migrating to more affordable cities like Milton Keynes and Peterborough. The cost of buying a home  in the capital has far outpaced incomes, with property prices now 14.1 times the median household income, up from 5.9 times in 1998. This affordability crisis has contributed to the ageing population, as London increasingly becomes a city for middle-aged homeowners rather than young first-time buyers. 

The Daily Telegraph (25/02/2025)  

UK house prices are projected to increase by 3.5% this year, driven by lower borrowing costs and a supportive Bank of England, which is expected to cut the bank rate to 3.75% by year-end. According to a poll of 20 housing market experts, prices will continue to rise by 4% next year. Aneisha Beveridge from Hamptons noted: "The slow downward drift in mortgage rates this year should boost prices and sales volumes." However, rental costs are anticipated to outpace house price growth, with a national increase of 4% expected this year. Despite these increases, property values remain constrained by higher taxation and a weak economic backdrop, with inflation projected at 2.8% this year. 

The I (25/02/2025)  

Completion is intensifying among lenders to offer the best mortgage deals to first-time buyers, as the housing market sees strong demand. Mortgage rates have dropped below 4% for the first time since November, following the Bank of England’s interest rate cut to 4.5%. Meanwhile, mortgage rates remain lower than in recent years, with the availability of 95% LTV mortgages fast increasing. Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: "Borrowers with a limited deposit may find it encouraging to see a growth in choice for mortgages available at 95% loan-to-value, now at its highest count in almost five years." 

The Independent (22/02/2025)   The Mirror (22/02/2025)  

New data from the ONS reveals that house prices in London remained stagnant in the year to December, with the average property value stuck at £549,000. This represents a 2.7% loss in value when adjusted for inflation. In contrast, the rest of the UK saw a 4.6% increase in house prices, the fastest growth in 23 months, with an average property fetching £268,000. The capital's high house price to earnings ratio of 8.22 compared to the national average of 6.55 highlights the affordability crisis, exacerbated by rising interest rates and recent tax changes. 

City AM (20/02/2025)   Financial Times (19/02/2025)  

The unaffordability of London's housing market has led to a significant decline in first-time buyers over the last decade, with numbers dropping by 8% from 2014 to 2024, according to Halifax. However, there was an uptick last year, as 44,500 first-time buyers entered the market, a 20% increase from 2023, attributed to improved mortgage affordability. Amanda Bryden, head of mortgages at Halifax, stated: “Last year saw a big increase in the number of first-time buyers, up almost a fifth from 2023.” The average first home in London costs £511,500, with deposits averaging £124,700. The situation is exacerbated by limited housing supply and rising prices, with many young people being driven out of the capital. Simon Gerrard, an estate agent, noted that the Chancellor's decision to scrap stamp duty relief has spurred activity among buyers. He said: “This move has prompted a lot of activity as buyers sought to bring forward their purchases ahead of the change in April this year, to save thousands of pounds in stamp duty.” 

The Standard (16/02/2025)  

Brian Monteith writes in the Daily Telegraph that the economic repercussions of Rachel Reeves' tenure as Chancellor are becoming increasingly evident, particularly in London's prime property market. He cites Coutts' London Prime Property index, which he says indicates a troubling trend, with 76% of prime properties sold at a discount, averaging an 8.9% reduction from asking prices. Monteith notes that the decline has been attributed to the exodus of high net-worth individuals, exacerbated by Reeves' tax increases and the ending of non-dom status. The Adam Smith Institute estimates that the policy could cost the Treasury £6.5bn in tax revenues and 23,000 jobs by 2035. Monteith adds that only Sir Keir Starmer can change the current direction of travel by changing his Chancellor. 

The Daily Telegraph (15/02/2025)