In 1995, 87% of properties sold in London were for less than £150,000, according to research from estate agency, Jackson-Stops & Staff.
However, only 2% of homes sold today now fetch below this price. Jackson Stops & Staff anticipates that homes sold below £120,000 will completely disappear from the market this year.
Robert Butterworth, head of research at Jackson-Stops & Staff, said: “Our research highlights the incredible changes in the London property market over the last 20 years. Back in 1995 homes valued under £200,000 made up the majority of the market profile, but today they are an endangered species. The entire profile of the market has been flipped on its head – a seismic shift that even a betting man would not have put his money on.”
London has seen a near sevenfold increase in house prices over the last 21 years, with the average price of properties sold in the capital currently sitting at £484,700.
Simple averages hide the distribution of prices however. 27% of properties sold last year, amounting to some 290,000 sales, were completed at under £300,000.
In 1995, when the “£10,000” London property disappeared from the market, nearly 75% of properties sold were under £100,000. Now there are no properties priced at £100,000 left on the market. They died out completely in 2008.
Meanwhile, in 1995, 93% of properties sold were below £200,000. Presently 93% of properties sold in London are above £200,000. This year the “under £120,000” property will disappear in London and Jackson-Stops & Staff estimate that in four years’ time, homes under £150,000 will disappear. Within 10 years they predict that all homes under £200,000 will be gone in London.
Butterworth added: “Rapid property price growth has a significant impact on an area and changes how it is perceived by both homeowners and those looking to make an investment in property. While average prices of lower value properties are currently rising at a faster pace than more expensive ones, good investments and opportunities are still out there which carry the attraction of living in the more central regions.
“London’s past and recent performance still drives consumer sentiment. The figures really say it all – a house bought for £198,000 in 2002 is now worth more than £550,000.”