Above: expensive flats in the new Dalston Square loom behind old accommodation at the junction
HACKNEY PROPERTY prices jumped 7.8% to £398,592 over the last year, according to government figures. The central London market has been boosted by money from foreign investors, lately from Greece and Spain, who feel the need of a safe haven for their funds.
Analysis of the latest Land Registry report suggests that the new 7% stamp duty on properties selling for more than £2 million and a 15 per cent rate for properties bought through offshore companies have not depressed the market as some property writers warned.
Asked about the Hackney property market, Kristjan Byfield, a founder of Shoreditch letting agent Base Property Specialists, told Loving Dalston that the boost was caused by several factors, including the growing popularity of prime areas such as Shoreditch, where demand and value continue to climb. “The area profile has also been raised enormously by the Olympics and the regeneration programme, making it attractive both for residential home-occupiers and international investors.
Uncertainty about the euro has also attracted big money to the London property market “and Hackney was a target area for many”. Byfield warned, however, that there were questions over what was next for the market. Prices in many parts of London were now higher than the peak of the property market in 2007 before the crash, despite mortgages still being harder to get than before.
He said: “In the short term, up to five years, I think the East London property market faces turbulence.” After the 2012 summer Olympics, a large volume of both sales and rental property was likely to be put on the market.
“Thousands of flats will hit the market in close proximity to one another, reversing the current situation of demand outstripping supply,” he said. “This will cause a short-term drop as we wait for the market to take up the slack.”
City observers were predicting that rates would climb early next year. “My concern is that this will cause a second, much more severe, property crash as defaults climb, repossessions hit and mortgage rates climb, becoming unaffordable for many more buyers.
“However, these two short-term incidents aside, I believe that East London has one of the strongest long-term outlooks of any part of the property market in the UK. With improved transport infrastructure, the Olympic Park becoming an established public space, the completion of Crossrail and much regeneration yet to be completed, the potential growth and security in Hackney for the foreseeable future is great.”
North London Action for the Homeless (NLAH) is a small Stoke Newington-based drop-in centre for homeless people. Mike Tomes, its manager, told Loving Dalston that a result of accommodation being “hopelessly out of reach for young people, and youth unemployment rising, is that many are forced to stay with their parents well into their twenties”.
He added: “This can cause friction at home, making it impossible to stay, especially when they can’t find work, and can lead to sofa-surfing and homelessness. This contrasts with the situation of people at other levels of the London economy.
The Land Registry survey shows that in the least year the biggest spenders have been Russians and East Europeans: on average they laid out £7.2 million on a new house or flat. A little down the scale, more than 100 London homes sold in the three months to June for at least £5 million.
David Altheer 080712
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