Which is London’s hottest residential borough?

Our annual CBRE Hot 100 report reveals the 2020 winners of London's residential market. By identifying the best boroughs in a number of categories, our report provides an in-depth look at the London housing market.

We are basing the best performing boroughs on the average house price, price growth over the past 5 years and rental growth over the same period. This year, Hackney takes the top spot, bumping last year’s winner Westminster down to 9th place.  Hackney’s vibrant arts and culture scene combined with the recent large-scale gentrification has attracted many residents and start-ups to the area, creating an ideal neighbourhood for young city professionals. The small but mighty Kensington & Chelsea remains in the top position for average house price at £1,346,456, almost 3 times London’s average.

The City of London remains in first place for rental growth over the past 5 years. However, due to the Covid-19 pandemic, this could change in the future. According to Zoopla, there is still high rental demand in London; however, it is much more localised to the outer boroughs due to the shift in current working trends.

Economic performance

London is one of the most well-known, vibrant economies in the world. With just 13% of the national population, London is responsible for 23% of the UK economy. The City of London is the new powerhouse of London, as its economic output has this year edged ahead of Westminster.  Workers in the City also earn the most, meaning the City of London ranks highest overall for financial performance.

Tower Hamlets has the second highest annual mean earnings for full-time workers; this will reflect high earning professional employees in Canary Wharf.  Richmond has the lowest unemployment rate, with Wandsworth a close second. Notably, the City of London is not included in our employment rate rankings, due to its small size and lack of permanent residents. However, it has over 500,000 workers and makes up for 10% of London’s workforce according to the ONS.

Development

The level of home building in London remains woefully low, with around an average 20,000 homes built each year. This compares with the Mayor’s London Plan target of 65,000.  We expect building rates to be ever lower this year as construction was hampered due to the coronavirus lockdown. So far this year, the number of new homes granted planning permission is down by 21%, with completions 10% lower, equating to 1,600 fewer new homes.

Brent had the highest number of construction completions, with 1,700 new homes built across the borough. This is closely followed by Tower Hamlets, which built just under 1,400 new homes. However, looking further ahead, Southwark and Barnet are likely to see the highest level of construction. Both boroughs have planning permissions totalling more than 3,000 new homes.


For more information on London residential markets, click here for the full report.