Watching property prices recover since the recession across the UK has been fascinating since the credit crunch.
The major problem with the reporting by the media of property prices is they use the property price report measures – which are year on year and month on month.
During price rises and falls, these are both very misleading measures of the market.
What you really want to know is:-
What was the average price at the height of the market
What did it fall to
Where are prices now?
And one other thing you want to know is when prices start to RECOVER (not rise month on month/year on year as often reported) and then, how long will it take for these price rises to peak.
If you are selling and you know when prices will peak, you can, to some extent, time your property sale to market it at the peak.
If you are buying, you have an idea of how long it the market will rise fall and by how much.
Of course this is all based on whether property prices mimic what they did in the past and they might not, but it does give you something to work with and watch out for!
How long did property prices recover for by London Borough?
The most astonishing property price rises were seen in Kensington and Chelsea. Prices here fell by 16% during the recession for just 8 months. Then the prices started to rise and hit their ‘peak’ performance in Kensington and Chelsea in June 2014, when they were 20% up year on year. This took 61 months to achieve, so prices soon recovered to their peak at the credit crunch and have continued to rise ever since, albeit at a decreasing growth rate.
Today in May 2015, Kensington and Chelsea are still increasing, but at their slowest rate, just 5.6% up year on year.
Longest rises in property prices to their peak
21 of the London Boroughs ie the majority have seen price increases for anything from 29 months to 48 months ie prices rose for two to four years post the recession until they reached their peak year on year increase.
All of the boroughs which have increased for this length of time, are way above their peak prices now.
Hillingdon is one of the lower performers, but still up 21% versus the peak, while others are seeing property prices now 50-60% more than they were.
These include boroughs like Ealing, Hackney and Camden.
Areas which haven’t seen such long increases include:-
Lewisham, Havering, Waltham Forest, Enfield, Croydon, Newham, Barking and Dagenham
Their property price rises lasted 10 to 14 months and they peaked back in 2014. Interestingly if they haven’t increased for long, they also don’t seem to have recovered as much to their peak with all boroughs bar Waltham Forest being just 9% to 20% higher than they were at the time of the credit crunch.
These rates are just a third of the levels of growth versus the ‘average’ London borough and as such, can be seen as ‘good value’ versus historic levels at the moment.