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Kensington and Chelsea most ‘recession proof’ property market

  • 31/01/2023
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Kensington and Chelsea most ‘recession proof’ property market
Kensington and Chelsea will be the most insulated from property price crashes due to the majority of households in the area owning their property outright and low levels of outstanding mortgage debt.

According to research from Garrington Property Finders, over a quarter of households in Kensington and Chelsea have bought their property outright and the level of outstanding mortgage debt is low at 7.3 per cent of the total value of homes.

Kensington and Chelsea also has a low proportion of first-time buyers, who the company says typically have lower levels of saving and are more vulnerable to financial stress, at 0.1 per cent.

The second and third spot on the ranking of most resilient areas to property price falls areas are taken by Westminster and Camden, who both have low percentages of first-time buyers at 0.2 per cent and 0.7 per cent.

The outstanding mortgage debt in both areas is also low, coming to 8.6 per cent and 12.2 per cent of the total values of homes in the area for Westminster and Camden apiece.

Hammersmith and Fulham was the only other London area in the top 10 at spot eight, with 0.5 per cent being first-time buyers and 15.3 per cent debt to equity percentage.


Provincial property price falls

Regional cities in the top 10 include Swansea, Oxford, York, Cambridge, Bournemouth and Exeter.

At the other end of the spectrum, around a third of households in Crawley have a mortgage on their home and a total debt-to-equity ratio stands at 21.4 per cent.

Crawley’s first-time buyer percentage is also standard at 7.1 per cent.

Other areas that are vulnerable to price falls include Milton Keynes, Barking and Dagenham, Slough, Aldershot, Swindon, Croydon, Dartford, Watford and Luton.

Jonathan Hopper, Garrington Property Finders’ CEO, said: “The property market is going through a rapid transition, but the biggest falls seen so far have been in transactions rather than prices. The most recent Land Registry data shows average prices paid across by the UK fell by just 0.3 per cent in November.

“Nevertheless, the ripple effects will intensify over the coming months as rising interest rates feed through into homeowners’ monthly mortgage payments. But our research indicates some markets will be affected much more than others.”

He continued: “Prime London postcodes, as well as several popular university cities, are the most likely to escape relatively unscathed. Homeowners in these markets often have a good chunk of equity under their belts and are therefore more insulated from rising mortgage costs.

“Unlike much of the country, the three London boroughs in our ‘most resilient’ top 10 also saw prices fall last year, making them less prone to further correction now and thus an attractive proposition to buyers looking for stability.

“By contrast, our research suggests that towns which saw very rapid post-pandemic price rises and lots of first-time buyers, such as Crawley and Milton Keynes, could be set for sharper price falls in 2023. For tactical buyers looking to secure a big discount, these more exposed areas could throw up some strong buying opportunities this year.”

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