Last month, the Financial Times published one of the more interesting maps that our Creative Director and CSO has glimpsed in recent times, a piece of cartography illustrating the change in property prices over the past five years in the triple-dip recession-hit United Kingdom. The picture is a sobering one, with the vast majority of the country covered in one or other shade of red: since 2007, the value of the housing stock of Northern Ireland has plunged 50%; one-bedroom flats in the Ibrox neighbourhood near central Glasgow presently retail for a measly £22,000.00.
There is one small part of the UK which has proven (at least thus far) resilient to the general reversal in the cost of property, which is London and a select few environs: indeed, the choicest central municipalities of Westminster and Kensington & Chelsea now have a combined real estate worth of more than £90bn, a higher nominal value than the entire property portfolio of Wales.
Yet within this island of house price inflation that may be the only thing standing between the nation’s banks and complete fiscal meltdown, there are some mysterious deflationary tendencies. Boroughs such as Bexley (-4%), Newham (-2%), Redbridge (-2%) and Barking & Dagenham (-11%) have all seen significant price falls in the last five years, with a number of neighbouring municipalities recording almost static growth levels. These are London’s property blackspots, places where a first-time buyer can once again purchase a three-bedroom house for between £100,000.00 and £250,000.00.
But why exactly are they blackspots at all? Why are property prices in these areas falling vis à vis other localities which are arguably at least as overvalued and not nearly as well endowed with new(ish) public transportation systems such as the Docklands Light Railway, Tramlink and London Overground? After some quick contemplation, we came to the following, tentative conclusions:
1. Historical Perceptions. The east and south-east of the capital has long suffered from a reputation as a crime-ridden, bombed out and polluted part of the world. This may have some truth to it – but it doesn’t correlate with the eye-watering property price hikes in Hackney (33%) and Tower Hamlets (24%) over the same period that the above-mentioned municipalities have lost value.
2. Broader Economic Reasons. The eastern half of London is synonymous with comparative (and in some cases, absolute) urban deprivation. But even within this part of the conurbation there are some locations broadly recognised as aspirational – not least leafy Redbridge. And there appears to be little correlation between the ghettoes of, say, Southwark and its 28% post-2007 property spike.
3. Primeval Swamp. Many of the boroughs where the property bubble has been pricked contain are characterised by possessing an unusually high African, Asian and Eastern European population, particularly recent migrants from West Africa, the Baltic nations, the CIS, China and South-East Asia. Is London a swinging, sophisticated capital? Or a city where novelty + ‘foreignness’ negates the possibility of ‘gentrification’?