Homes in London account for almost a quarter of the value of the entire UK residential market, new analysis from Zoopla has found.
The capital’s 3.8 million homes are worth an estimated £2.64 trillion, the figures show, which is equivalent to around 24 per cent of the worth of the country’s entire residential market.
At £2.64 trillion, London’s property market is worth more than the combined market capitalisation of all FTSE 100 companies (£2.5 trillion).
“London’s housing market remains the most valuable market in the UK, but higher home values have created affordability problems that have held back house price inflation over the last decade compared to the UK as a whole,” says Richard Donnell, Zoopla’s executive director.
“Earnings are rising faster than house prices which is helping to reset affordability and opening up more opportunities for homeowners to move home while broadly static home prices in inner London are presenting increasing opportunities for savvy home buyers.”
London’s highest value boroughs
Of course, the value of housing stock differs from borough to borough, and is dependent on both property values and the number of properties in that area.
Houses in London’s top five most expensive boroughs account for a combined total of £703.2 billion, or 21 per cent of the total value of London’s housing market. These boroughs are Westminster, Kensington and Chelsea, Wandsworth, Camden and Barnet.
Westminster has the most valuable housing stock, worth an estimated £175.1 billion, or 27 per cent of the capital’s total housing value. The median price of a property in the borough is £847,400.
Next is Kensington and Chelsea, where homes are valued at £153.2 billion, despite a higher median property price (£1,008,700).
It’s followed by Wandsworth (£130.3 billion), Camden (£127 billion) and Barnet (£117.6 billion).
London’s most affordable boroughs, on the other hand, are Barking and Dagenham, Croydon, Lewisham, Newham and Bexley, where homes are worth a total of £281.2 billion.
Yet despite property values being lower — the average home in Barking and Dagenham costs £390,600 — houses in these five boroughs still represent 11 per cent of London’s market value due to the sheer number of homes. Combined, these boroughs account for 16 per cent of the capital’s homes.
In Barking and Dagenham, the total value of homes is £29.7 billion. In Croydon, where homes cost an average of £422,300, the total value is still £75.9 billion.
Over the past decade, houses in outer London boroughs have seen greater price rises than those in inner London. The higher cost of housing has contributed to this imbalance, as well as softening demand due to economic and tax changes.
According to Zoopla, inner London home values have risen by 10 per cent (under 1 per cent per year), significantly underperforming the 41 per cent increase in average UK home values over the same period.
There are also more homes in outer London, outweighing the lower volume of higher value homes in inner London.
This means that the difference in overall housing value between inner and outer London is quite close: inner London boroughs represent 51 per cent of the capital’s total residential value, while outer London boroughs make up 49 per cent.
In outer London, high density boroughs like Barnet and Ealing have the highest share of housing equity. In Barnet, homes are worth £117.6 billion, while in Ealing they have a value of £92 billion.
This is followed by Bromley (£90 million) and Croydon (£87 billion).