Newham house price boom creates winners and losers
PUBLISHED: 11:00 24 August 2016 | UPDATED: 11:50 24 August 2016
The borough's house prices are rising faster than anywhere else in the capital - but what does this mean for residents?
City workers attracted to lower prices
Just like Walthamstow before it, East Ham is experiencing a property boom.
The High Street North branch of estate agents Douglas Allen is at the centre of this revolution.
“It’s one of our busiest sites,” Rob Wade, the firm’s associate operations director for east London, said.
“I used to work in Walthamstow and I remember people coming in from Hackney and Islington.
“Now the people who would go there in the past are coming to East Ham – lots of city workers are seeing it as competitively priced and moving in.”
Mr Wade is also confident prices will keep rising.
“It’s very much an upward trend now,” he said. “You’ve got excellent transport links and local facilities.
“It’s also good news for some that 30,000 people won’t pass by every week for the West Ham games.”
He notes that long-time residents will see a “healthy profit” on homes they bought in the past.
“If it continues, then there’s no reason people buying now won’t see a similar profit.”
Mr Wade, however, understands that not everybody will find the East Ham property market affordable – but that for London it is very good.
“Walthamstow used to be cheaper because a lot of people turned their noses up at it,” he explained.
“The same was true of East Ham – but that’s already changing.
“It will happen to other places in the future.”
Depending on who you ask, the boom is either a well-deserved dividend for homeowners and a sign of the area’s progress or a crisis putting families on the streets.
Between June 2015 and June 2016, house prices in Newham rose by an average of £62,694 – or 21.4 per cent.
That means the average home here now costs £355,950, while the England average is £229,383.
The instinct for many Londoners is to react gloomily to such increases – both Sadiq Khan and Zac Goldsmith frequently referred to the capital’s “housing crisis” during the mayoral election.
But for new homeowner Nick Monopoli, there is also a bright side to be considered.
“I think the price rises are good for the area,” the 34-year-old, who bought a house in Maryland with his partner in January this year, said.
“Especially for the people who have been here for a long time – they are seeing their values rise.”
He added: “You can see new people moving in from all different races and religions, more work being done on gardens and houses – it’s the domino effect.”
A brief history of Newham’s house prices
Back in 1995, while Toy Story was wowing cinema audiences across the world, the average price of a house in Newham was £53,539.
With average yearly earnings in the capital then at £22,830, owning your home was not quite so remarkable.
Fast-forward to May 1997 – as Tony Blair waved to adoring crowds on the steps of No 10 Downing Street following his landslide election victory – and average Newham prices were £59,411.
When Mr Blair stood for his second term as prime minister, in June 2001, there had been a revolution in the capital – and in Newham, too. The average price of a house in the borough had nearly doubled to £106,640. By 2006 – the year Twitter was launched – there had been another doubling: houses had jumped to an average price of £212,391. In 11 years, houses in Newham had grown more than £150,000 in value. But it didn’t continue upwards every year – in June 2009, as the world stared into the abyss created by the financial crisis, average prices had fallen to £182,436.
For close to five years, there was a steady but modest growth in prices – £194,632 in January 2010, £208,687 in January 2011, £213,512 in January 2012, £216,276 in January 2013.
By August 2015, however, there had been another explosion in prices – £301,504 was now the average in Newham – on the back of the 2012 Olympics.
Nick, who works for 20th Century Fox, moved to the borough from Broxbourne, Hertfordshire, after being attracted by the relatively low house prices – and bought his two-bed house for more than £400,000.
“Newham was the most affordable area we looked at – in many ways it’s the final place to change in the way Hackney and others have,” he said.
“The area around Stratford has changed so much – the rezoning really put it on the map, but the Olympics and Westfield have been part of what seems a masterplan.”
Stamford Hill-born Nick said he remembered visiting Stratford in 2001 and “couldn’t wait to leave”.
“It was a dive,” he said. “You look at it now and it’s just amazing.”
But Nick is keen to stress that he is aware house prices aren’t good for everyone – and admits he only “just managed” to get a mortgage because he “joined forces” with his partner of four years, Martin.
“I don’t want to sound boastful or anything – but I feel I’ve taken a leap of faith and I’m very happy with my decision,” he said.
“I’m here for the long-haul – I’m not rubbing my hands and counting my money.”
‘People are ending up in places like Liverpool and Birmingham’
Rising house prices are not good for everyone – especially those on low wages.
Keith Fernett, CEO of homelessness charity Caritas Anchor House – which is based in Canning Town – said ballooning costs are forcing people out of the borough.
“It’s good for people who already own a home in Newham,” he said.
“But for their children, for people working for £7.20 an hour, there is no chance of them buying and renting is difficult.”
The problem, Mr Fernett said, is quite simple.
“It’s a supply and demand issue,” he said.
“There aren’t enough houses being built, so prices are rising, and landlords then think they can raise rent accordingly.
“The result is many people are being made homeless.”
Mr Fernett explained there is a “gap” of about £200 between housing benefit payments and the market cost of rent.
“We have found it virtually impossible to rehouse people in Newham because of that,” he said.
“That means people are ending up in places like Liverpool and Birmingham – miles away from their family, doctor, dentist, everything.”
Mr Fernett said there has been a price reduction in the central London housing market – but stressed this means little for the people of Newham.
“Post-Brexit, places like Kensington and Chelsea have seen a drop,” he said.
“But that isn’t going to help us average folk, is it?
“It simply means a £10m house now costs £1m less.”
Since renovating his home, its price has already risen by nearly £100,000 – but there is far more than cash keeping Nick in Maryland.
“There is a great community feel here,” he said. “Even if I had the option of living somewhere like Clapham, I’d still choose Newham.”
He added: “I’ve never felt fear here, I’ve never felt worried about crime.”