Your ultimate guide to London's house price 'crash'
Your ultimate guide to London's house price 'crash'
One of the toughest housing markets in the world is only getting tougher
Morning — it’s now exactly a year since commentators were predicting brutal downturns in the UK housing market, with some expecting price drops of up to 30%. London, we were told, would be even more extreme than elsewhere. Some optimistically hoped this might finally make buying in the capital easier. But in the past year, the very opposite has played out. So after your Sunday roundup below, the Spy breaks down the 10 things you should know about London’s house price ‘crash’, one year on.
Plus: London police censoring grime music, the King announces a pedicab crackdown, and a kitten rescue.
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What we’ve spied
🎵 A secretive Met Police unit has been monitoring and taking down drill music from the internet. An investigation by journalist Jonathan Kanengoni published this week found the Met made 654 referrals to YouTube to takedown drill music/rap videos, with 635 removals then approved, though exact details of the takedowns weren’t released. The requests were made by a Met specialist team called Project Alpha, ostensibly tasked with gathering intelligence from social media with the aim of preventing gang crime in London. Drill is a rap subgenre started in Chicago that moved over to London in 2012, and it’s come to the attention of police chiefs, who blame the music for “perpetuating violence” against Black Londoners. Critics say the focus on drill is a form of racial profiling. Kanengoni also examines the case of Chinx (OS), a rapper who grew up on the Regent’s Park Estate in Camden and recently had a drill track taken down from Instagram after a request from the Met.
🚲 London’s most dangerous cycling junctions have been revealed in a new mapping project of serious and fatal collisions across the city. A cluster of junctions turning onto Upper Tooting Road was named as the most dangerous by the London Cycling Campaign on Tuesday, with data showing 29 collisions reported in the area between 2018 and 2022. The figures are perhaps unsurprising, given recent footage showing cars edging out of side streets straight into the busy cycle lane, which is part of CS7 cycle superhighway and sees 3,000 daily journeys. All four of London’s worst junctions identified by LCC were in the south of the city, the others being: Lambeth Road & Kennington Road, Wandsworth Road & North Street, and Mitcham Road & Leighton Street. North London’s worst is Finsbury Park & Blackstock Road, and in the centre it's a junction near Holborn station. It follows LCC launching a dangerous junctions campaign in 2022 following the deaths of Dr Marta Krawiec and Shatha Ali while cycling in Holborn. Reacting to the stats, City Hall said it had plans to improve safety at some of the junctions highlighted by the data. You can see a full interactive map of the junctions for yourself here.
👑 Elsewhere in biking: time’s up for London’s unregulated pedicabs after a crackdown was announced in the King’s Speech. There’s probably no worse PR than having the King himself label you as a “scourge” of the capital, as Charles did in his speech to Parliament on Tuesday. But for a while now there’s been a mounting campaign against the often neon-lit, boombox-adorned carriages that shepherd tourists through central London, sometimes slapping them with an outrageously high fare at the end of the journey. The government is now planning to pass legislation that will give TfL the power to regulate pedicabs through a licensing regime and fare controls, and the move has been welcomed by the likes of Westminster council, which has long grumbled about pedicabs clogging up the West End. The Guardian’s been speaking to some pedicab drivers since the announcement — many actually welcome the prospect of a bit of order, but also fear that strict fare limits will make them go bust.
💩 A gross one — we finally have a concrete figure on the sheer scale of sewage dumping in the River Thames. Around 72bn litres — or 29,000 Olympic swimming pools — have been pumped into the river by Thames Water since 2020, according to figures obtained by the Liberal Democrats. Mogden near Twickenham was the worst affected site, where 17.1bn litres of sewage was discharged into the river, closely followed by Crossness in east London, where 15.8bn litres of sewage was spilled. These stats aren’t often made public — Thames Water only has a legal obligation to publish the number of hours it’s pumping sewage into London’s river, not the actual volume of the discharges. Worth knowing: there’s a mega sewer called Thames Tideway being built in central London right now that will redirect some — but not all — sewage discharges in the capital. Worth reading: our investigation earlier this year into sewage dumping at a nature reserve in east London (Spy 140523).
💚 The commission deciding the future of the Grenfell Tower has proposed a memorial at the site emphasising height and visibility — but also concluded that the building “cannot remain forever in its current form”. The revelations come from the Guardian, which has obtained a report from the Grenfell Tower Memorial Commission recently circulated to the bereaved, survivors and local people. Though the commission reportedly believes a permanent structure reaching high into the sky is needed, it has seemingly dashed the hopes of some campaigners that the burnt-out structure would remain on the west London skyline as a permanent reminder of the disaster.
🗳️ Susan Hall may have little hope of becoming London’s next mayor after all — a new poll shows Sadiq Khan with a seemingly insurmountable lead. On Monday a new YouGov poll found that 50% of Londoners intend to vote for Labour’s Khan at the mayoral election next year, compared to 25% for Hall of the Conservatives. It’s a marked difference from a separate poll conducted by JL Partners just two months ago, which put Khan at 35% and Hall at 32% — a very fragile lead of just three percentage points. Clearly rattled, Hall gave a big interview with the Evening Standard shortly after the poll in which she insisted ‘I can beat Sadiq Khan’, while also calling for a ban on the pro-Palestine march yesterday. Still one big question mark though: Jeremy Corbyn, who’s dropped another hint he may run for mayor. Further north: Hackney voters have elected Labour’s Caroline Woodley for borough mayor, after an election triggered by the resignation of her predecessor over a child porn scandal. In other news for Khan: police are investigating a deepfake video of the mayor shared by far-right groups in which an AI-generated version of Khan’s voice says Armistice Day should have been postponed for the pro-Palestine protest (the video is here, but it’s a confirmed fake).
🐭 Disney has found itself in hot water over its recreation of the 7/7 London bombings for an upcoming drama series. Last month the entertainment giant began shooting scenes in southeast London for Suspect: The Shooting of Jean Charles de Menezes, which tells the story of a Brazilian electrician who was killed by police after he was mistaken for a fugitive in the wake of the 2005 terror attacks. After images from the set of a replica double-decker bus with its roof torn off by the blast, survivors of the bombings hit out, calling the recreation ‘tasteless’ and saying Disney didn’t tell them its plans ahead of time. A spokesperson for Disney says it is producing the series with the “utmost sensitivity and respect”.
🌸 On Saturday a funeral was held for Elianne Andam, the 15-year-old girl who was fatally stabbed in Croydon in September. The service for her family and friends took place at the New Life Christian Centre in Croydon — her coffin proceeded through the streets of the south London borough beforehand in a white coach pulled by white horses with pink head plumes. Earlier in the week her family had spoken publicly for the first time since the stabbing, which took place while Elianne was on her way to school. Elianne’s two aunties sat down for an emotional interview with Sky News, saying the family was "living in a nightmare" and accusing the government of not doing enough to tackle knife crime.
🎭 A group of small arts businesses on the South Bank are being evicted to make way for an office development. Traders at the Old Paradise Yard say they were expecting more notice before being turfed out from the arts space, which is being redeveloped into Lambeth’s biggest-ever office block, the size of 27 football pitches. The project had actually been ordered to pause by the government back in August as ministers considered holding a public inquiry, and the traders believe they should be able to stay until work starts again. Elsewhere in planning news: plans for 700 new student rooms are raising eyebrows in Deptford, while Stamford Bridge locals are hitting out at plans for a new hospitality suite at Chelsea FC’s ground.
📣 There’s not much the Spy can add to the national coverage of Saturday’s pro-Palestine march in central London, but for the record here’s all the key footage we spotted across the city:
Tommy Robinson and far-right counter-protesters making their way down Tottenham Court Road before the chaos started
The counter-protesters breaking through a police barrier while attempting to reach the Cenotaph
Police clashing with counter-protesters in Pimlico and kettling them into the Pride of Pimlico pub
Counter protestors chanting “you’re not English anymore” at police in Chinatown
Pro-Palestine protestors starting off on their march from Hyde Park
Aerial footage showing the scale of the march (police estimated attendance of 300,000)
Chants of “stop bombing Gaza”, as well as the more controversial “from the river to the sea” chant
Counter protestors chanting “Allah, Allah, who the f*** is Allah?” at protestors on Lambeth Bridge, as well as throwing objects at police
Housing secretary Michael Gove being surrounded by pro-Palestine protesters at Victoria station
🚇 Two small Tube stories for you: first is news that TfL is holding its first auditions for buskers in six years, as it looks to bring some live music to the Lizzy Line. Second, Google Street View is going underground to Tube stations, in an effort to give passengers a better sense of layouts.
🔍 And finally, we leave you with:
Someone ‘watching porn and masturbating’ while driving on Cannon Street
Green Day’s surprise set at a pub in Covent Garden
Notorious tagger 10Foot’s new graffiti at London Bridge
A chart on how London’s bus use compares to the rest of the UK since the 1970s
A Lime Bike battery fire on Caledonian Road
An analysis of the recent backlash against the Blue Posts pub in Soho
A Met officer barrelling through a Tube barrier in hot pursuit
Colouring London, a huge project to map building information across the capital
What to know about London’s house price ‘crash’
Two outrageous London property adverts have been doing the rounds lately. One is a house on Nelson Road, Wimbledon, on the market for £650,000 despite a massive hole in the ceiling of a manky bathroom. The second is a tiny shipping container in east London, your new single-room, tin can of a home for just £75,000.
In years past these would be standard fare, classics of the London ripoff genre. But in 2023, at a time when the property market is supposed to be tanking, the steep price tags are particularly hard to swallow.
Instead, this year has been a bit of a damp squib for London’s housing market. Some hoped the predictions of a crash would finally make London affordable. In most cases, the very opposite has happened. Here’s your Spy guide to how it’s all playing out.
1. London prices are still falling — and now faster than the rest of the UK. We’ve now had exactly a year of house price data since Liz Truss’s infamous mini-Budget — the one that spooked markets and accelerated the interest rate hikes that started this whole mess. According to stats published this week by Halifax, one of the UK’s biggest mortgage lenders, in that time the average price of a London home has fallen by 4.6%, or from £549,000 to £524,000. It’s a sizeable fall — £25,000 shaved off between October 2022 and 2023. In 10% deposit terms, that would mean £2,500 less needed in savings to be eligible for an average London home. What’s more, prices in London have kept falling month-on-month, unlike the rest of the UK, which in October saw a rise in the price of the average home.
2. And yet buying with a mortgage in London has become harder. The thing is — the price falls seen so far in London basically mean we’ve gone back a year and a bit on the house price chart, to around 2021. But unlike then, the cost to borrow, in the form of interest rates on mortgages, has shot up massively. From about 1.5% to 5.5%, at the time of writing. If you combine that with those average London price figures from Halifax — £549,000 to £524,000 — and assume a 10% deposit, you’re staring down the barrel of an extra £1,000 a month just to pay the mortgage on the same home. That’s likely why data from the Greater London Authority shows the number of house sales in London is now at its lowest level in roughly a decade — even lower than during the Covid lockdown in 2020.
3. Plus, some weird boroughs have been remarkably resilient to the downturn. The fall in house prices hasn’t been felt uniformly across the capital. Some are the usual suspects — highly desirable boroughs like Kensington and Chelsea or Westminster, where prices have basically just stayed put in the past year. But then there are places like Haringey or Havering which, despite it all, hasn’t even seen the average house price fall by even 1%, according to data shared with the Spy by property site Zoopla. Another weird one is Hackney — a borough where sale activity is comparable to traditionally posher boroughs, in a sign of the changing times in the area.
4. The sharpest price falls have mostly been in outer London. Of all boroughs, Croydon has seen the biggest fall in average house prices. But it was already one of the cheapest boroughs anyway, with the typical home now sitting at just under £400,000. Waltham Forest and Bexley are other outer London boroughs with big falls. The only real exception is Greenwich, which is the inner London borough with the biggest fall.
5. It’s all a far cry from the 2007/08 crash. By and large, the price falls seen over the past year in London are in the single digits, and usually below 5%. Still a significant downturn, and a real gut punch for anyone who bought just before the falls kicked in — but really quite meager a ‘crash’ when compared to the one caused by the 2007 financial crisis. Back then, between the first quarter of 2008 and the first quarter of 2009, house prices in London fell by more than 18%. If a fall on that scale happened in London today, that would mean £100,000 wiped off the value of the typical home in just a year, rather than the £25,000 fall we’ve actually witnessed.
6. But there’s still concern about Londoners defaulting on their mortgages. The reason why many analysts feared specifically for London’s housing market when rates started rising last year is because of just how much Londoners have had to borrow to get on the property ladder. Big mortgages mean big rises in monthly payments when rates go up, and so a greater risk of someone finding themselves unable to pay. Figures calculated by think tank the Resolution Foundation sum it up — between October 2022 and the end of 2024, the average annual mortgage payment in London is set to rise by £8,000. That’s compared to just £3,400 for a mortgage holder in Wales. And there are still many mortgage holders in the capital who’ve yet to face this higher cost, as they await their fixed term mortgage expiring. Analysis published back in September by accountants Mazars found that 19 of the UK’s top 20 ‘riskiest mortgage’ postcodes right now were in London. These are areas where the loan is more than 4.5 times the borrower’s earnings, and southwest London dominated much of the top list — Wandsworth, Battersea, Wimbledon and Tooting.
7. The top end of the market — sales of multimillion properties — has remained “robust”. While London’s mortgage buyers are feeling the pain, wealthy cash buyers apparently aren’t. Data from property agency Savills agency shows that there were 390 sales of London properties worth £5m in the first nine months to September of this year. That was slightly down on the same period last year, 459, but still 67% higher than the pre-pandemic average (the three years to 2019). That also included 120 properties worth £10m — up 50% on the pre-pandemic average. Most of these multimillion-pound property sales were in Chelsea, Kensington and Belgravia.
8. The knock-on effect for London renters has been devastating. The combination of mortgage rate rises with London’s existing housing supply shortage has turbocharged rents. The latest data from property site Rightmove shows that average London rents rose to a record of £2,627 a month in October, up 12% on a year earlier. Prospective tenants in the capital are now typically battling 15 other people when finding a home. It’s no wonder, then, that homelessness is also on the rise, with stats published this week showing that the number of rough sleepers in London is now at the highest figure on record.
9. The supply of new builds in London is also being throttled. Aside from rising mortgage rates, the other big economic factor in play in London at the moment has been rising construction costs amid spiraling inflation. The impact has been plain to see in the data — in August the Greater London Authority found that the completion of new homes in London in 2023 is now significantly behind the pace of housebuilding in 2022, 2021 and 2019. It was only marginally higher than 2020. Another sign of the slowdown is the number of planning applications being lodged with London councils right now — it’s now at its lowest level since 2010. It all doesn’t bode particularly well for anyone looking to buy in London in the medium term…
10. The government’s upcoming Autumn Statement may change things. Each month estate agents across London are surveyed by the Royal Institution of Chartered Surveyors, to hear their thoughts on the current state of the city’s market. The consensus in the latest survey this month? “Higher inflation and mortgage rates continue to compromise demand,” responded estate agent Jeremy Leaf, summing up the wider view. But on Wednesday, November 22, the UK’s chancellor Jeremy Hunt will be delivering his Autumn Statement, and there’s a general expectation he’ll do something to pep up housing demand. Among the options reportedly being mulled is a stamp duty holiday, a particular boon for London property buyers, who often find themselves paying the higher rates of stamp duty given high prices. So good news for buyers — but whether Hunt will also be unveiling more support to Londoners getting hit by higher mortgage costs remains to be seen.
Trying to buy in London at the moment? Renegotiating your mortgage? We’d love to tell your story — get in touch at londonspy@substack.com.