London property forecasts 2022: areas with up to 10% price growth
Two leading property market specialists predict London house prices to grow between 2% and 10% and share the most up-and-coming neighbourhoods.
London property market is already recovering from the heavy impact of the pandemic: house prices, rents, and investment are gathering momentum.
According to the latest forecast from real estate professionals, London will continue its recovery in 2022.
London property forecasts by Savills
Savills expects Prime Central London (PCL) to lead the way in the recovery. It is impressive as PCL real estate market has lagged behind the rest of the country during the height of the pandemic as people’s property priorities changed dramatically.
Experts predict house prices to increase by 8% in 2022 and 24% over the next 5 years. It is chiefly due to the return of international tenants and buyers in the capital and the recovering appeal of the vibrant city life.
For example, the average property in Kensington and Chelsea now costs £1.45m. It means homes in the Royal borough might see a staggering £116k of added value.
Experts at Savills think that savvy property buyers are aware that current house prices in PCL are below the peak levels seen in 2014. It is mainly because of the market uncertainty caused by Brexit, the pandemic, and stamp duty changes.
Lucian Cook at Savills says the PCL market offers «good value for money». The market is expected to gather momentum in the mid-term perspective as international demand pick up. Overseas customers will join the local buyers who have already begun to act on opportunities.
London property forecasts by Strutt & Parker
Property experts at Strutt & Parker likewise revealed their expectations for 2022. The PCL prices might increase between 5% and 10% in the following year and up to 35% in the next 5 years. From September 2020 to September 2021, prices went up slightly by 1.2%.
Specialists expect an increase in outer London home prices as well. Luxury suburban areas such as Chiswick and Putney might see prices up by 4% in 2022 and by 13.7% in the next 5 years.
The average London home now costs £676k. Property values across the capital might rise by just 2% in 2022 and a modest 5.6% by 2026.
It is mainly due to the potentially increasing interest rates, holding off borrowing of more significant funds. According to the forecasts, buyers will have to pay around £714k for an average London home in 2026.
Property forecasts beyond London
Outside London, commute destinations such as Guildford and Winchester will continue to see solid demand from buyers who found the benefits of remote work. Prices there might rise by 19% in the next 5 years.
Finally, the average prices across the UK increased by 9% in 2021 to £328k. The growth pace is expected to slow down in the following months.
Savills says the pace is unstable and might fall to 3.5% in the following year, but stand at 13% in the next 5 years, with prices reaching £371k.