Halifax has revealed that, since opening 30 years ago this week, the average house price in towns near the M25 has grown by £326,000 (551%) – a monthly increase of £905.
The average house price in 40 towns, spanning eight counties, close to the London Orbital Motorway has grown from £59,183 in 1986 to £385,085.
This is an increase of £325,903 (or 551%) – equivalent to an increase of £905 per month for the last 30 years, an annual rise of £10,863 (6.4%). By comparison, the Retail Price Index has increased by 169% over the period.
The £325,903 increase in prices of these M25 towns has significantly exceeded the £208,163 rise in average house prices nationally (from £37,763 to £245,926) over the same period by £117,740 (or 57%). In percentage terms, the increase was identical to the national rise, at 551%.
Martin Ellis, housing economist at Halifax, said: “House prices in towns close to the M25 have grown significantly since the official opening of the motorway in 1986. In terms of average values, the most expensive towns close to the London Orbital are in the southern section of the motorway and on the north side, while towns east of London typically have the lowest prices.
“Towns have, on average, outperformed the South East region as a whole with an average price £52,000 higher, yet prices have failed to keep pace with the dramatic rise in property values in the capital over the past three decades. As a result, towns around the M25 are now typically significantly lower than in London despite being on a par when the motorway opened.”
House prices in 10 towns close to the M25 have grown by over £400,000 since 1986. Barnet in Hertfordshire has recorded the biggest increase with the average price growing eight-fold from £69,744 to £539,708 – an increase of £469,964 (or 674%). The next largest rise has been in Rickmansworth, Hertfordshire where the average value has grown by £468,448, followed by the Surrey towns of Reigate (£458,734) and Leatherhead (£443,034), St Albans in Hertfordshire (£434,438), Chigwell in Essex (£426,255) and Epsom in Surrey (£422,626).
Rickmansworth is the most expensive town in this survey with an average house price of £551,959. Overall, there are five towns with an average price of at least £500,000. The other three are Reigate (£532,352), Leatherhead (£530,759) and St Albans (£501,634).
Four of the 10 most expensive M25 towns are between junctions 5 and 9 on the southern section of the motorway between western Kent and Surrey: Reigate, Leatherhead, Sevenoaks (with an average price of £498,648) and Epsom (£494,912).
The three most expensive towns close to the M25 in 1986 had an average price of £86,000; Leatherhead (£87,725), Sevenoaks (£86,789) and Rickmansworth (£83,511).
Eight of the 10 least expensive towns are on the eastern section of the M25 (junctions 29 to 31 and 1) in Essex and north Kent. The least expensive are South Ockendon (£258,569), Grays (£268,195) and Erith (£276,127).
Despite the large price rises over the past 30 years, average values for the M25 towns are now significantly below those for London as a whole. In contrast, in 1986 the average house price in the M25 towns was £341 (0.6%) higher than in the capital. By 2016 this had reversed with average property values in London being £122,653 higher (32%), reflecting the dramatic increase in property values in the capital over the past 30 years.
There is a mixed picture when comparing prices in the M25 towns to those in their immediate neighbourhood. In exactly half of the 40 towns surveyed, houses trade at a premium compared to their county average. The largest premium is in Chigwell where the average house price of £496,729 is £179,264 higher than in Essex as a whole. The next highest is in Sevenoaks, with a price premium of £177,599, and Epping (£153,092).
At the other end of the scale, the average house price in Hayes is £105,936 lower than in Middlesex, followed by Redhill in Surrey (a discount of £68,682) and Hoddesdon in Hertfordshire (£76,547 lower).
Over the past three decades, house prices in the M25 towns have typically outperfomed the South East region as a whole. Average price of homes in the South East have grown from £51,947 in 1986 to £332,819 in 2016 – an increase of 541%, compared to an average rise of 551% in the M25 towns.
Properties in the M25 towns also trade at a premium to the region, with an average price that is £52,267 (or 16%) higher than the South East average; up from £7,236 (or 14%) in 1986.
Since 2011, the average price for all towns has grown by 54%, easily exceeding the UK rise of 42%. In cash terms, the average house price has increased by £135,456; almost twice the national increase of £72,284.
More than eight out of 10 towns – 34 of the 40 surveyed – have seen house price growth, in cash terms, of over £100,000 in the past five years. The biggest rises have been in Chigwell (£275,278), Reigate (£249,450) and Barnet (£213,284).