London, 20th July 2017. Felicity Young,+44 (0)20 7087 5108
JLL reveals how to make the best home-ownership journey in London
From first time buyer to multimillionaire
New research from JLL reveals how climbing the London property ladder over the past 20 years could have made a typical first time buyer into a multimillionaire. The data also highlights how to make the best property journey over the next 20 years.
JLL analysed Land Registry data captured since 1995 to ascertain the potential equity a typical homeowner could have amassed in the Capital if they had moved every five years.
A person who chose a move each time to what was to become the best performing London borough for price growth at that time would now have more than £2m of property wealth.
The research shows that the ‘best property journey’ over the past 20 years would have seen a buyer purchase their first home in Tower Hamlets in 1995 for the then average house price of £59,865. If they had then made subsequent moves buying homes at modest loan to value ratios in Barking & Dagenham in 2000, Kensington & Chelsea in 2005, Camden in 2010 and Waltham Forest in 2015, they could now be living in a £2.4m home.
In contrast, if this buyer had stayed at the original Tower Hamlets home they bought in 1995 until January 2017, based on average house price growth in the borough, this house would now be valued at £417,000.
The research also shows that a person who chose ‘badly’ in their five moves since 1995 would still have seen capital value growth of £260,000 to their name – an amount in excess of the current UK average house price of £220,000.
JLL Residential Research Director Nick Whitten says: “This research highlights that even through a period including two recessions, the London housing market has been an outperformer.
“People all over the UK typically move several times in their lives, stepping up the various rungs of the ladder. This data shows that a Londoner who has got ‘lucky’ with their choices could have become a multi-millionaire simply from moving home.
“London house price growth has averaged 8% per annum over the past 35 years. Anyone showing long term commitment to the London housing market is likely to be experiencing an uplift in property values over this time.”
Looking forward, JLL forecasts the potential strong price growth contenders over the next 20 years based on a move every five years.
The first location highlighted by JLL is the Borough of Ealing where five Crossrail stations are set to open from 2019 – the joint most of any London borough, together with Newham.
For the second leg of the property journey from 2022, JLL highlights the Borough of Redbridge where there will be four Crossrail stations.
Five years later in 2027, JLL suggests the Borough of Haringey could be a strong price growth contender based on an assumption that Crossrail 2 is delivered in the early 2030s. Haringey is expected to be one of the biggest beneficiaries of Crossrail 2 with a total of six stations.
Finally, in 2032, JLL highlights Lewisham, an area that would be expected to benefit significantly from the proposed Bakerloo Line extension from Elephant & Castle to Lewisham.
Looking ahead, Whitten adds: “Areas undergoing a significant change on the back infrastructure improvements are good contenders for strong price growth.
“But, importantly whilst we acknowledge the increase in value of residential property in the Capital over recent years, we must also acknowledge that it is becoming increasingly difficult and costly for aspiring buyers looking to get on the London housing ladder. It is vital that the supply of housing in London is increased with as wide a range of products and tenures as possible.”