Is your house on the fast track?: David Lawson says the recovery is pushing up values to boom levels in some areas

House prices in London are going like a train. That might not seem the most appropriate comparison when the rail network grinds regularly to a halt, yet it is entirely accurate. Some are belting along, others remain stuck in a siding.

The signals went to green last year in large swathes of central London, spurred by big bonuses among City workers and increasing attention from overseas investors. Estate agent Cluttons says that more than half the sales this year have been to foreigners.

This has pushed up values of higher-priced homes in Mayfair, Belgravia, Kensington and St John's Wood by a fifth or more over the past 12 months. But it has not stopped there. The recovery has spilled into Fulham, Battersea and Wandsworth.

'There is a view that property values seen in the boom would not return for many years, said Ian Homersham, joint chairman of agents John D Wood. 'But they have already reached - and passed this level in many areas. The firm has just sold a four-bedroom house in Jubilee Place, Chelsea, for pounds 575,000. The one next door went for pounds 470,000 in early 1989. Another in Smith Terrace fetched pounds 572,000 in June, almost pounds 70,000 more than the price in late 1989.

But what about the rest of us in more 'ordinary prop-erty? According to the Halifax Building Society, the average London home costs pounds 85,500 - or just under pounds 63,500 if you prefer Nationwide's figures.

And therein lies the reason why Londoners have not been dancing in the streets over their good fortune. Average prices across the capital rose by only 4 per cent in the year to June, says the London Research Centre, which breaks down the Halifax figures to boroughs. In fact they were down 5 per cent in Westminster - although there was an 11 per cent jump between April and June.

This throws an air of gloom over owners who feel unable to sell at those prices. Around 80 per cent of buyers who took on homes in the first three months of 1989 still have mortgages bigger than the value of their property, says the centre.

But Yolande Barnes of Savills Research, who first predicted London prices would soar, merely gets angry. 'These reports paint a false picture because they take no account of cash deals and are biased to cheaper homes which take up most mortgages.

Up-market property is roaring ahead, and that has traditionally dragged the rest of us along in its wake. But if gloom is continuously ladled out with a large spoon, the recovery will be pushed back. Confidence is the only bar to revival, she insists.

The Halifax rejects such accusations, pointing out that it tweaks the figures to eliminate bias. The LRC also says it adjusts for different mixes of property used in each survey. But it is not just rich people who are reaping the rewards of recovery.

John D Wood quotes a two-room garden flat in Octavia Street, Battersea, sold for pounds 80,000 in May. An identical one in the next street fetched pounds 79,500 in 1987. A small Battersea semi is on the market for pounds 245,000 compared with a price of pounds 183,000 in 1987, pounds 223,000 in 1990 and a dip back to pounds 195,000 in 1992.

But, in the end, good fortune boils down to where you live and the kind of home. 'Local supply and demand for particular kinds of property are very important, saidTom Tangney, who handled the Octavia Street deal.

Three-bed houses, which probably typify the standard London family home, have been in great demand. This has generally pushed up values, say agents Winkworth.

Again, this varies by area. Prices in Notting Hill, Knightsbridge, Kensington, St John's Wood and the West End have risen between 10 and 15 per cent over the 12 months to July. West London has done almost as well, with Hammersmith, Fulham, Shepherd's Bush and Chiswick coming out 10 per cent ahead and Ealing even higher. Putney, Battersea, Blackheath, Islington, Kentish Town and Finchley are in the same bracket, with Bow and Streatham creeping up behind. But many areas have experienced more modest rises.

East Sheen, Dulwich and Surrey Quays in south London are up only 5 per cent. North of the river Hendon and Highgate are at this level, while Hackney and Golders Green struggled to 3 per cent.

Poor old Catford has seen no change. Its problem is that it lies near a more attractive area, says Winkworth. They just cannot compete for buyers.

But even a 10 per cent rise in Blackheath prices for three-bed homes over the past 12 months has not put them out of reach of buyers who would once have been able to afford only Catford. Most demand here is for four and five-bed homes, where values have risen by 10 per cent.

It all remains thoroughly confusing. Your home could have risen in value by 18 per cent, by 10 per cent or nothing at all, depending whether it is a St John's Wood flat, a Chiswick semi or a Catford house. And small flats are, in many cases, still worth less than they cost because today's first-timers are jumping a step up the ladder directly to two-bed flats.

To misquote the ultimate authority: 'To him that hath shall be given. To him that hath not shall be taken away.

(Photograph omitted)

Discover more property articles at Homes and Property
News
people
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film Ridley Scott reveals truth behind casting decisions of Exodus
News
people
Sport
footballArsenal 2 Borussia Dortmund 0: And they can still top the group
PROMOTED VIDEO
News
Ed Miliband visiting the Holocaust museum in Jerusalem. The Labour leader has spoken more openly of his heritage recently
newsAttacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But are the barbs more sinister?
Arts and Entertainment
'Felfie' (2014) by Alison Jackson
photographyNew exhibition shows how female creatives are changing the way women are portrayed in advertising
News
i100
Life and Style
Fright night: the board game dates back to at least 1890
life
Environment
The vaquita is being killed by fishermen trying to catch the totoaba fish, which is prized in China
environmentJust 97 of the 'world's cutest' sea mammals remain
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Data Warehouse & Business Intelligence Co-ordinator

£35000 per annum: Ashdown Group: Required skills include SQL querying, SSRS, u...

Ashdown Group: C#.Net Developer - C#, ASP.Net, PHP, HTML, JavaScript, CSS

£30000 - £35000 per annum: Ashdown Group: C#.Net Developer - C#, ASP.Net, HTML...

Argyll Scott International: Senior Business Analyst- Insurance

Negotiable: Argyll Scott International: Senior Business Analyst - Insurance ...

Recruitment Genius: Property Manager

£25000 - £29000 per annum: Recruitment Genius: This independent, growing Sales...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?