• House price growth in London has been outperforming the rest of the country since 2008, with rises over the past year being particularly strong. However, with affordability constraints biting, we expect the level of growth to slow. According to our forecasts for the London mainstream market, house prices will rise by 24.4% in the five years to 2018. Our forecasts apply to the second hand market, new build values may not move at the same rate.

• Prime London: Up to now, the strongest growth in prime London has been recorded in Islington, Canary Wharf and Wapping, reflecting confidence among young financial sector employees and investor buyers targeting these professionals. This buoyancy has enticed more developers to pitch their schemes higher up the market.

• Mortgage constraints brought about by rigorous stress testing requirements by the Bank of England on top of the Mortgage Market Review, will have the biggest impact in London where lending multiples are higher than in other parts of the country.

• Help to Buy 1: The impact of the Government backed equity loan scheme has been relatively low in London, supporting an average 11% of new development. However, it has played a significant part in delivering sales in lower value boroughs.

• Future Connections: Additional transport links to open up areas further east would stimulate the development of more mainstream housing. The latest version of the London Plan states improvements to the DLR are required to increase capacity alongside large scale development at Canning Town, Royal Albert and Gallions Reach.

Click Table 1 below to enlarge

Taken from
London Development: Building opportunities East of City