Written on 9 September 2024 by Ray Boulger
The publication of the Grenfell report prompted me to look how a lot impression that terrible fireplace has had on the values of flats on the whole and London specifically, as London has a higher proportion of excessive rise flats. Of course, different elements may even have impacted the relative worth of flats in comparison with different property sorts, specifically the WFH/Hybrid working following COVID, however I recommend Grenfell has had by far the largest impression.
The nearest home sort to flats is terraced and so I’ve researched the Land Registry website online to check the relative efficiency of flats to terraced homes in addition to the figures for all properties.
The newest revealed Land Registry figures are for June and so I checked out common costs for the 7 years from Grenfell and the 7 earlier years. The impression of Grenfell gained’t have been mirrored within the Land Registry figures till 2 or 3 months after the hearth in June 2017, however as the newest obtainable figures are to June 2024 I’ve in contrast the 7 years from June 2017 with the 7 earlier years.
The desk under exhibits the dramatic impression Grenfell has had on values however however most likely underestimates the true distinction. This is as a result of few of probably the most badly affected flats, which have clearly depreciated greater than the typical flat, have been offered since Grenfell and subsequently gross sales recorded by the Land Registry since 2017 can be disproportionately skewed in direction of the much less affected flats.
The figures are:
Jun 2010
Jun 2017
Jun 2024
% Increase 2010 – 2024
% Increase 2010 – 2017
% Increase 2017 – 2024
UK Average Prices (£)
All
171,689
221,833
287,924
67.7
29.2
29.8
Flats
146,799
203,274
232,436
58.3
38.5
14.3
Terraced
140,462
179,414
239,000
70.2
27.7
33.2
London Average Prices
All
284,541
480,152
523,134
83.9
68.7
9.0
Flats
253,666
428,001
434,818
71.4
68.7
1.6
Terraced
288,347
490,877
571,783
98.3
70.2
16.5
As the desk exhibits, for the entire of the UK, there was broadly an equal enhance within the worth of all properties for every 7 12 months interval, however in London this enhance was massively biased to the primary 7 years as London recovered a lot quicker than the remainder of the UK after the Global Financial Crisis. This is strictly the identical as what occurred after the property crash within the early Nineties.
The All Properties determine for London exhibits little or no enhance within the final 7 years and for studios nearly none, however, as with the remainder of the UK, the rise within the worth of terraced homes in London has far outpaced that of flats throughout that interval, whereas within the earlier 7 years there was little distinction.
The relaxation of the UK highlights the identical variations between flats and terraced homes. In the primary 7 12 months interval the worth of flats appreciated considerably greater than terraced homes, however this pattern was massively reversed within the second 7 12 months interval.
Safeguards for leaseholders in The Building Safety Act 2022 grew to become efficient on 1st Sept this 12 months, severely limiting their legal responsibility for will increase in service expenses for non-standard remedial prices, in addition to excluding all legal responsibility for changing non-compliant cladding.
This could encourage some potential purchasers who’ve rejected the concept of shopping for a flat to rethink, particularly in view of the change in relative pricing in comparison with the alternate options during the last 7 years. However, although the Act now limits financial legal responsibility of leaseholders, the psychological scars since Grenfell will nonetheless inhibit others.
Categories:Property Market, Ray Boulger
