Croydon House Prices: How did 2013 fare and what can we expect from 2014?

By - Friday 17th January, 2014

According to Right Move, average house prices in Croydon increased 18.8% in 2013 – the third highest rate in Greater London. Will 2014 see a continued rise?

In December 2012, the average house in Croydon would come on to the market at £279,392. An eye-watering figure in itself, but relatively affordable when compared to the rest of Greater London, with only Newham, Havering, Barking & Dagenham and Bexley registering more affordable properties. The Greater London average at this point was £464,398, so Croydon represented a relative bargain.

Fast-forward to December 2013. The economy is recovering, the house price boom has continued across London and the UK, and Croydon in particular has had a positive year in terms of property investment – Westfield/Hammerson and Berkeley Homes two developers of note –  suggesting greater optimism and confidence in the town. This may partly explain why homes in the Croydon market now come to sale at an average of £331,896. Only the boroughs of Tower Hamlets and Hammersmith & Fulham registered larger percentage increases in 2013. Prices in Greater London overall increased to £513,466 – an increase of 10.6%, far below Croydon’s average. But what does this all mean?

The heating of the residential market suggests greater demand is being placed on the borough for housing. This may have occurred for a number of reasons. As mentioned above, the renewed confidence in the town suggests agents may now be valuing houses at a premium compared to a year ago. The increasingly unaffordable nature of central and inner London housing may also suggest that people are being pushed towards the fringes of the city in order to seek  a place to live. This, of course, has the inverse effect of actually raising prices by putting extra pressure on a limited market in Croydon, which is still in need of much more housing including of an affordable nature.

The UK needs to build 245,000 homes every single year until 2031 to keep up with demand, and 80,000 of these should be affordable

What, therefore, can we expect for 2014? One may infer from this Daily Telegraph article that Croydon prices will continue to rise, with real estate firm Savills predicting “Greater London catching up with prime central London” and expecting the commuter belt to register rises of between 5% and 6% on average. Given the surge in prices in Croydon in 2013, this suggests potentially an even bigger rise in 2014.

Happily for some, the same article predicts Croydon will be a ‘development hot-spot’ in 2014, and advises “forward-thinking investors” to “take a punt soon.” A squeeze on demand is set to continue, and whilst it should perhaps be taken as a positive that Croydon is in demand, there are of course certain worries which arise.

According to this article in the Guardian, the UK needs to build 245,000 homes every single year until 2031 to keep up with demand, and 80,000 of these should be affordable. Croydon, being an increasingly in-demand area and situated within Greater London, will need to take a greater slice of these developments than the vast majority of other areas around the country. Unless there is a house price crash, which seems unlikely given the chances of demand dropping is small, house prices in Croydon will continue to grow, and property will seemingly become less affordable throughout 2014.

Positives and negatives therefore for Croydon and its residents. Certainly, the heating of the housing market suggests Croydon is becoming a more desirable place to live, both because of the outside investment it is attracting and also because inner London is becoming less affordable. On the flip side, despite initiatives by the government such as Help To Buy, it seems climbing on to the property ladder will become harder for most.

The frustrating aspect for many Croydonians will be that, in fact, there is not much authorities or developers can do within current legislation to stop this increase. Market demands are such that outside influences will have great effect. The solution to these rises are not simple: As this article explains, it is difficult for councils and developers to extract value from affordable housing heavy developments, so the argument that some propose – ‘why can’t the council/developer just build more affordable housing?’ – is naive and fails to fully assess the costs of land and development.

Tom Lickley

Tom Lickley

Contributing a variety of roles to the Citizen since early 2013, Tom now focuses upon regeneration, urbanism and real estate writing. He is a strategic communications consultant specialising in the real estate sector, and counts a number of the world's largest investment and fund management companies amongst his clients.

More Posts - Twitter

  • Anne Giles

    The 3 bed houses in Selsdon Vale are now going for between £315,000 to £319,000.


    Beware though – house prices are known to stagnate and/or fall when in the vicinity of a waste incinerator, and we could soon have one in Beddington belching out toxic fumes.

    • monir

      What do you mean ?? As i have flat on franklin way, was looking to sell but decide to hold it as there more confidents in the area.