At Coversure Croydon we’ve been providing property owners with affordable, high-quality home and landlord insurance quotes for many years now. As such, we’ve become recognised as the local property insurance specialists, and we like to keep an eye on what’s happening in the Croydon property market.
With news just in that October saw property asking prices rising again, despite rising inflation and higher mortgage rates, and with rents at record highs, can these property increases continue? In this latest blog from Coversure Croydon, the home of, high-quality property and landlord insurance, we look at the Croydon housing market to find out what the future holds for property in our area.
What’s The Average Price Of A Home In Croydon?
According to Zoopla, the average sold price for property in Croydon in the last 12 months is £394,381. With the average UK home reportedly costing somewhere in the region of £258,000, that puts Croydon’s house prices at a 153% premium. Of course, it’s well documented that house prices vary even more when looking at London as a whole. With the average London property now coming in at £740,597, the figures suggest that Croydon could provide good value for money. One property finder poll ranked Croydon at 6th in their list of the best areas to move to in London when considering the environment, quality of life, architecture, and heritage, and from a “going green” perspective.
Are Houses In Croydon Affordable?
This year’s ONS Housing Affordability Report stated that housing affordability has worsened since 1997. With the average affordability ratio moving from 3.5 to 9.1 with affordability worsening the most in London, where house prices have increased faster than earnings. The six least affordable local authorities are all in London, and the next three are all located in the surrounding South East. You may think that the rate may be more favorable in Croydon, where the average house price is lower. Unfortunately not, with an affordability ratio of 11.9, someone working full-time could typically expect to have to spend nearly 12 times their annual salary on purchasing a home.
Of course, with London being a prime location for rentals, we know from the number of landlord insurance policies we provide that many properties are bought as businesses as well as homes.
With that in mind, what does the rental market look like in Croydon and the surrounding areas…
How Much Does It Cost To Rent In Croydon?
With areas in Greater London seeing the most significant rises in rental demand, it’s perhaps not surprising that, according to one property search website, the average rent in Croydon currently stands at £1,685 pcm. That’s 45% higher than the average rental price in the UK. According to the charitable foundation Trust for London, the average rent for a one-bedroom home cost the equivalent of 46.3% of the gross-median pay in London between April 2021-March 2022. So, is renting more affordable than buying a property in Croydon? Research published in the summer showed that in South London areas like Croydon, tenants spent around 20% of their salary on rent compared to 77% for tenants renting further into the city.
While property prices are lower in Croydon and South London compared to inner London and rents more affordable; the figures do appear to just keep rising. Why are property prices and rents in Croydon rising?
Supply vs Demand Deficit Keeps Property Prices And Rents High
Rightmove reported that, in the year to September 2022, the number of properties available to rent fell by 35% while the number of enquiries to view rental properties rose by 14% as more landlords exit the private rented sector. But why are more Landlords selling up? Well, it’s not just rents and house prices that are rising, costs for house maintenance and repairs are on the rise too, along with increases in Landlord responsibilities as legislation changes have been introduced, with more to come. So Landlords are selling up, and furthermore, research undertaken by Propertymark showed that over half of previously rented homes being sold are not returning to the sector once sold. Rising demand for rentals whilst supply is falling is the critical factor influencing rents.
Add to that the chronic housing shortage in the UK, and we have a fundamental issue of supply unable to keep up with demand. According to research commissioned by the National Housing Federation and crisis from Heriot-Watt University, 340,000 new homes are needed annually in England. The Government’s target is 300,000 new homes per year. However, it’s a target that is not being met with just 216,000 homes being supplied in 2020/2021. In London, the Mayor’s central affordable housing pledge of 116,000 new builds to be started by March 2023 is reportedly looking “increasingly challenging”. So, it doesn’t look like the situation is going to improve anytime soon.
The current economic uncertainty and higher interest rates affecting mortgage rates could impact demand, but will the latest stamp duty cuts counteract this? With such a shortage of housing available, only time will tell how house prices and rents will fare into 2023.
What Might The Future Hold For Croydon’s Property Market?
Making predictions about the UK property market is not easily done. While the frenzy of housing buying we’ve seen of late appears to have slowed, with supply an issue in both the house buying and rental sectors it is difficult to predict how current economic factors may impact prices and rents. With regards to the rental market, we await to see when the Renters Reform Bill will make its way through parliament. Will further changes in responsibilities result in more landlords selling up? We will have to wait and see. What we do know now is that if homeowners and landlords want good quality property insurance policies to protect their property, they should call Coversure Croydon on (0207) 998 0102.
Like Some Independent Property Insurance Help?
Whatever your circumstances, whether you need home or landlord insurance, give the friendly Coversure Croydon team a call on (0207) 998 0102 or email Coversure Croydon at email@example.com and let us help make sure you’ve got the right insurance cover for your property.
UK house prices rise in October despite economic turmoil | Housing market | The Guardian
Sold House Prices – Get UK house prices online – Zoopla
What’s happening with house prices in the UK? – Zoopla
Ranked: London’s best and worst places to live in 2022 – MyLondon
Housing affordability in England and Wales – Office for National Statistics (ons.gov.uk)
London rents: Competition for homes pushes up prices – BBC News
Home.co.uk: Property For Rent In Croydon
HomeLet Rental Index | Average Rent UK |Rental Price Index 2020 | HomeLet Rental Index
The five London postcodes where tenants spend the least on rent | Evening Standard
A shrinking private rented sector | Propertymark
Tackling the under-supply of housing in England – House of Commons Library (parliament.uk)
London affordable homes target difficult to hit, City Hall admits – BBC News