Croydon House Prices: Mid-2013 Review

By - Wednesday 19th June, 2013

Following on from his summary of Croydon’s house prices in March, Tom Lickley assesses how house prices have fared so far in 2013

View Towards Taberner House

Photo by Peter G Trimming. Image used under Creative Commons License.

It’s been a good year so far for house prices in Croydon, according to both the Land Registry and Right Move.

In March I found that Croydon house prices were some of the best performing in Greater London, which in turn was the best performing region in the country. The latest update (released by Right Move on the 17th June) showed that average house price in Croydon for May was £307,023, an increase on May’s prices by 0.8% and an increase on June 2012’s figures by 9.2%. Compared to other London boroughs, Croydon continues to perform well, the 11th best performing borough out of thirty-two measured in the past year (the figures don’t include the City of London). Looking at the south of the Thames, Croydon is bettered only by Lambeth, Greenwich, and Southwark, all of which can be described as ‘Inner London’ and hence perhaps expected to increase further given high gentrification of these areas. Despite the relatively small increase in monthly prices, there is still good potential for investment as Croydon is the 5th cheapest borough in the capital, with only Havering, Newham, Bexley, and Barking & Dagenham cheaper.

The average price of a house in Croydon, compared to Greater London and England & Wales. Data sourced from Right Move.

The graphs included suggest Croydon is performing similarly to national trends – perhaps to a more exaggerated level. Compared to the national (England & Wales) average, prices are considerably higher, as might be expected of a London borough. Since the turn of the year, there has been house price growth of on average 1.6%. National growth is at 1.7% on average this year. While this may be a slight worry, given the good performance of Greater London through the financial crisis, compared to the malaise the rest of the country has experienced, it perhaps should be expected that when non-London prices do improve, as these figures cautiously point to, then they will increase at a higher rate than Croydon and most London boroughs in order to ‘catch up.’

Compared to London, Right Move suggests Croydon is being outperformed by Greater London as a whole this year, despite good growth in both regions. The monthly average of 1.6% growth in Croydon since the turn of the year compares to 1.8% in London. Year on year growth in Greater London is 6.2%, lower than the Croydon figure of 9.2%. This is greatly positive, as it indicates that Croydon has responded well to the aftermath of events such as the 2011 riots and the global economic crisis, and may be being driven by higher demand, investment from developments such as The Croydon Partnership and continued excellent transport links.

The average monthly percentage change in average house price in Croydon, compared to Greater London and England & Wales. Data sourced from Right Move.

A look at the Land Registry’s figures, a government website updated only through to April 2013 at the time of writing, suggests a similar trend. Compared to the national (England & Wales) average, Croydon is performing very strongly indeed, as might be expected of a London borough. Since the turn of the year, there has been settled growth of on average 0.5%, the Land Registry contrasting (rather sharply, it must be said) with Right Move’s estimates by suggesting average house price in Croydon is £257,132. Year on year growth is at 4.7% at the end of April 2013, compared to national growth of just 0.7% (significantly driven by Greater London).

Compared to London, the Land Registry suggests Croydon is being consistently outperformed by Greater London as a whole, despite good growth in both regions. However, one must take these with a pinch of salt; results in London are often skewed by anomalies and huge growth in certain boroughs – the consistency that Croydon is enjoying is a good sign. Year on year growth in Greater London is 6.2%.

What does this all mean? As I mentioned in my last report, a house in Croydon still looks like a good investment, both in terms of future potential and relatively cheap prices. For its location, close to Gatwick and central London with excellent transport links, and close to the countryside if in need of a weekend escape, Croydon offers great value compared to many locations around the country. If anything, Croydon should perhaps be performing more strongly than it already is; time will tell if prices continue to rise.

Average change in house price from previous year in Croydon, compared to Greater London and England & Wales. Data sourced from Right Move.

Of course, an increase in house prices is not universally positive news. Higher house prices means homes are becoming increasingly unaffordable generally and in particular in Greater London. There is plenty Croydon Council can do to offset this and maintain economic growth, attracting wealthier residents to the town in order to provide a boost to the local economy whilst at the same time increasing affordable housing within the borough. Fortunately, despite some disappointing decisions being made (such as the lower than required affordable housing in the St George’s House redevelopment and the £900,000 discount the owner of the half-finished IYLO building has to pay towards affordable housing provision) some positive steps have been taken; the council has announced Affinity Sutton is to build 99 new affordable homes on London Road and the council maintains a strategy which ‘welcomes the introduction of affordable rent.’

For those looking at moving to the borough however, a house in Croydon can be a relative bargain, and may prove to be a sage investment in a decade, given the exciting developments Croydon is beginning to attract, combined with the sense of community evident on this very site.

Note: For those questioning the considerable discrepancy between the two sources (Right Move and Land Registry) it is important to note that the methodology these two sources (and any other sources) use in finding house price samples will be different. For instance, Right Move use asking prices, whilst Land Registry use prices homes were sold for. Asking prices tend to reflect how much agents view a house as actually being worth – sale prices do not factor in sales needed to generate quick revenue, sales after death of resident, etc. However, sources tend to agree on trends (i.e. high or poor performing areas) which is perhaps the best conclusion to take from the figures. Of course, the best way to judge how much your house is worth is via a valuation from your local estate agent!

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.

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  • Liz Sheppard-Jones

    This is a very interesting overview – thanks. And for those of us old enough to have once purchased property despite being non-stockbrokers, good news for the wallet. Is the Affinity Sutton development on one on the corner of Bensham Lane? (The link isn’t working). 99 affordable homes is something at least.

    But soaring house prices and our rejoicing over them are signs of collective insanity and we should try to keep a sense of that. I’m waiting for the real wake-up-and-smell-the-coffee price crash.

    • Tom Lickley

      Apologies, Liz – the council seemed to have removed the news from their site as of today. You are correct with regards to the location – the link has been updated.

      • Liz Sheppard-Jones

        It looks pretty groovy – and surely it should be called Half Moon House?

  • David White

    “Asking prices tend to reflect how much agents value a house as actually being worth”. Not in my experience. Asking prices reflect the maximum sellers and agents hope to achieve. Actual sale prices are usually lower.

    • Tom Lickley

      Very true – I was suggesting that agents by nature always view the house as worth more than it will sell for!