According to analysis by property website Zoopla, the value of London’s residential property market exceeds the combined market capitalisation of all FTSE 100 firms.
The research reveals that the total value of the 3.8 million homes in London is now estimated at £2.64 trillion, more than the £2.5 trillion combined market cap of all FTSE 100 companies.
While London has been lagging behind the rest of the country in terms of house price growth, its residential property market still accounts for 24% of the entire UK residential market.
Zoopla noted that despite being buffeted by Brexit, the pandemic, and sustained high interest rates, the sheer scale of London’s residential market value remains comparable to the world’s largest economic entities and corporations.
London has seen a prolonged period of reduced house price growth, however, which Zoopla said is impacted by the high cost of housing. Inner London house prices have increased by 10% over the past decade, which is far below the 41% increase in average UK home prices over the same period.
House prices have continued to grow in outer London, however, as affordability constraints place more demand on homes further out from the centre of the city.
The difference between inner and outer London is evident in the median and total housing values of London’s individual boroughs. The top five most valuable boroughs in the city are Westminster, Kensington and Chelsea, Wandsworth, Camden, and Barnet, only the last of which is in outer London.
56% of the capital’s residential properties are in outer London, accounting for 49% of London’s total residential value, although the value of the homes in these boroughs are often driven by a higher number of family homes rather than median house price.
Zoopla’s data shows that the most affordable boroughs in London are Barking and Dagenham, Croydon, Lewisham, Newham, and Bexley.
“London’s housing market remains the most valuable market in the UK, but higher home values have created affordability problems that have held back house price inflation over the last decade compared to the UK as a whole,” said Zoopla executive director Richard Donnell.
“Earnings are rising faster than house prices which is helping to reset affordability and opening up more opportunities for homeowners to move home while broadly static home prices in inner London are presenting increasing opportunities for savvy home buyers.”
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