North London property prices jump as buyers return to capital

PRICES of property in the north of London have surged as young professionals return to jobs in the capital, a survey showed.

Property search website Rightmove said on Monday (Feb 20) that asking prices for homes in the borough of Camden rose 17.2 per cent from the same period a year ago, and were up 6 per cent in the past month alone.

Known for its chaotic market and steampunk aesthetic, Camden is a draw for those seeking trendy entertainment spots and established pubs, as well as green spaces such as Primrose Hill and Regent’s Park.

In terms of prices, property there – at an average asking price of £1.16 million (S$1.86 million) – trails only the richest boroughs of Westminster, Kensington and Chelsea. 

Simon Ward, senior sales consultant at the Camden branch of estate agent Dexters, said: “It’s amazing how much some of these young professionals have to spend.”

For those unable to afford the prices in leafier Camden, two other boroughs – Barnet and Islington – are nearby. Even then, prices in both have notched up annual gains of about 8 per cent.

The richer boroughs, meanwhile, landed near the bottom of the table when it came to asking-price increases, with an annual gain of just 0.7 per cent in Westminster and a drop of 2.2 per cent in Kensington and Chelsea.

The activity in Camden hints at burgeoning strength in the broader national housing market, where soaring mortgage rates have strained affordability. Last month, mortgage lenders said that prices across the country hit their longest losing streak since 2008.

Rightmove said asking prices across the nation were unchanged in February. This led to gloomy predictions of a plunge in prices, with some pencilling in a peak-to-trough fall of more than 10 per cent. But rather than a steep slide in house prices, Rightmove’s director of property science, Tim Bannister, said he was expecting a “(transition) towards a more normal level of activity, after the market turbulence at the end of last year”.

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February is usually a time when new sellers come to the market, seeking higher prices. Bannister said the latest data showed vendors “breaking with tradition and showing unseasonal initial pricing restraint” as conditions demanded “greater realism on price”.

But while rising interest rates have made mortgages more expensive, pressures in the rental market mean it has become increasingly cost-effective for tenants to buy a house if they can afford the deposit. Rightmove said average rates for a 15 per cent deposit five-year fixed mortgage are now at 4.82 per cent, down from 5.9 per cent in October 2022.

Dexters’ Ward said: “The lettings market is so expensive, and it’s so competitive, that it makes more sense to buy.” He added that “mortgage rates were at a staggeringly unattainable level last September and October”, in the aftermath of the budget set out during Liz Truss’ short tenure as prime minister. 

Across London, it has become increasingly common for multiple prospective renters to bid on a property at the same time. Rising mortgage rates are pushing more people into the rental market, even as landlords seek to maintain their margins by driving up what they charge tenants.

That, along with the surge in people returning to London, is adding fuel to the rental market.

Ward said he recently tried to rent a property, and went for a viewing in the evening. At 3am the next day, he received an alert on his phone, telling him that the owner had accepted another offer after 50 viewings.

His observations fit with Rightmove’s data, which showed activity recovering faster among first-time buyers than among those on the upper rungs of the housing ladder.

Bannister said: “It’s a positive sign for the market, to see many in the first-time buyer sector getting on with their moves. Some first-time buyers will still be priced out of their original plans and may need to look for a cheaper property.”

Rightmove’s survey showed further signs that the market would hold up, avoiding the worst-case scenarios of a sharp crash predicted by some forecasters.

The number of people contacting estate agents rose 11 per cent over the past two weeks, compared with the same period before the pandemic in 2019. Agreed sales also fell by 11 per cent, in a more gradual dip than the 15 per cent drop recorded last month. BLOOMBERG