London Property Prices
London’s Best-Performing Property Market is Slowing Down

The market for existing homes in Hackney is finally showing signs of slowing down after more than 10 years of almost uninterrupted price growth.

Homes in the East London borough now sell for almost £568,000 ($696,000), largely unchanged since the end of 2021, according to an analysis of UK Land Registry data by Bloomberg News that smoothes the data to remove outlier transactions.

Property prices in the area soared after the financial crisis as the area saw an influx of hipsters working in the tech and creative industries who had been priced out of neighbouring Islington.

That helped it become the best-performing borough in the capital over the past decade, when price appreciation and percentage gains are combined, according to Anthony Codling, Chief Executive Officer at property platform Twindig.

The borough could now prove something of a bellwether for the London housing market after an influx of tech workers, who could afford the down payment for homes as their stock options surged in value, helped push prices beyond the means of most locals.

Shares in key tech employers such as Amazon.com Inc. and Alphabet Inc. soared in recent years, only to suffer badly this year as markets dropped. Meta Platforms Inc. stock has fallen more than 40% this year, while Amazon shares are down about a third, curbing potential buyers’ spending power. The stocks have still more than doubled over the last five years.

Meanwhile rents in London have risen 15.7% in the last year to almost £1,700 a month, according to property platform Zoopla. That outstripped the 9.1% increase in the rest of the country as people start to move back to the capital. A record 30% of homes let in London this year went to people who previously lived outside the city, estate agent Hamptons said on Monday.

Read more: The Great London Property Exodus Is Reversing as Tenants Return

While property values have increased significantly in Hackney since January 2018, both asking and sale prices in the borough and its adjoining areas appear to be softening, according to an insight from data provider TwentyCi. The firm cautioned that that could be due to the type of property coming to market.

The volume of sales is showing early signs of a slight slowing, the same analysis shows.

The slowdown contrasts with Waltham Forest, where many of those priced out of Hackney have chosen to buy. Adjusted prices in that borough rose 14.5% in the five years through February, Bloomberg’s figures showed, compared with an 8.5% gain for Hackney in the same period.

Hackney may be following in Islington’s footsteps in becoming unaffordable for many buyers, meaning another borough may emerge as the city’s next hotspot, Codling at Twindig said.

“Where will that be? Probably somewhere along the Elizabeth line,” he said, referring to London’s new train line, opening on May 24, which will connect Heathrow Airport in the west to Canary Wharf and areas further east.