The nine places the house price boom left behind

‘There is a saturation of flats in Reading and a large influx of newbuilds’

House price growth has soared in every corner of the country this year – but there are a handful of places that the boom entirely forgot.

Nationally, values hit a record high in September, with annual growth hitting 11.8pc. But in nine local authorities across Britain, house prices in 2021 were lower than in 2017, according to analysis by Hamptons estate agents.

London accounted for six of these underdogs – with the capital’s priciest postcodes hit hardest. In the City of London, City of Westminster, and Kensington and Chelsea, home values in 2021 were down 14pc, 12pc and 5pc respectively compared with 2017.

In these areas, typically half of buyers are from overseas, but this flow of money all but disappeared with the introduction of travel restrictions. Meanwhile, the Airbnb market collapsed as tourism dried up at the start of the pandemic, and rents plunged 20pc with the shift to homeworking.

Cory Askew, of Chestertons estate agents, said: “Since last June, there has been a stark contrast between Zone One and the frenetic activity we have seen in the more leafy boroughs of London.”

The market boom also missed out apartments, as buyers sought out houses with gardens. When Hamptons analysed only the flat market, prices were down in a total of 56 places.

In the commuter town of Reading in Berkshire, prices in 2021 were down 1pc compared with 2017. House prices were up, but the average was dragged down by flats. In the apartment market specifically, the drop was 6pc. Developers rushed to build in Reading after it was announced as a station on the Elizabeth Line. Perry Hawkins, of Roger Platt estate agents, said: “Crossrail meant house prices really soared in 2016.”

But the project was plagued by delays and demand has not kept up with supply. “There is a saturation of flats in central Reading, with a large influx of new-builds. But now the people selling them three or five years down the line have to compete with other new-build projects, which come with developer incentives,” Mr Hawkins said.

Several of London’s more fringe boroughs with a high density of flats and new-build homes also underperformed. In Wandsworth, which includes the Nine Elms redevelopment, the average house price in 2021 was £602,186. This was 3pc down compared with 2017.

In Tower Hamlets, the average house price in 2021 was £454,066, a 1pc drop compared with 2017. But the annual price fall was nearly triple that at 2.6pc. Homes cost £12,150 less than they did in 2020.

“Tower Hamlets has been really heavily impacted by two things. First, during the pandemic, nobody needed to work in Shoreditch or Canary Wharf – so the rental market was hit. The second problem is cladding issues. Remediation is moving at a glacial pace and we are still coming across whole buildings that are unmortgageable,” said Mr Askew.

In Barnet, in north London, property prices rose by £ 11,147 year- onyear to £536,987. However, this was still marginally down on the borough’s 2017 peak.

London’s priciest postcodes have been hit the hardest