London Property Prices
London’s Cheapest Borough Is Booming on Rail, Boat Rides to City

Barking and Dagenham is the only remaining London borough where house prices in the resale market have risen by double digits.

The east London district, stretching upwards from the north bank of the River Thames, defied a wider house price slowdown in the capital, according to a Bloomberg News analysis of UK Land Registry data in the 12 months through July. The opening of a new train station in the summer, connecting Barking Riverside to central London in as little as 22 minutes, may have contributed to the 10% increase in the borough’s home prices during the period.

The figures, which are smoothed to remove outlier transactions, show the median price paid for an existing home in Barking and Dagenham was more than £377,000 ($449,460) in July compared with about £341,900 one year prior.

“For at least a generation, Barking and Dagenham has been the cheapest corner of the capital,” said David Fell, senior analyst at Hamptons International. “However, the longer-term impact of new transport links and regeneration means the borough is poised to lift itself off the bottom of London’s house price league table.”

Transport for London says reduced journey times to central London will help create 7,000 more homes in the Barking Riverside area, on top of the 3,000 already built or under construction in the former industrial site. An Uber Boat service which opened in April also runs from Barking Riverside Pier to central London locations including Canary Wharf, Westminster and the City.

The borough will also benefit from the relocation of the City of London’s historic wholesale markets, which are set to open on a purpose-built site in Dagenham Dock in the next five years. Nearly £1 billion will be invested into the project to regenerate 42 acres of industrial land into a modern food market, creating an estimated 2,700 new jobs and generating billions in economic growth.

Britain’s housing market faces severe disruption as it adapts to higher mortgage rates which have soared since a market rout that was triggered in September after the government of then-Prime Minister Liz Truss announced a series of unfunded tax cuts. The replacement of that government and a reversal of most of Truss’s policies have so far failed to cool inflation that topped 11% last month, a 41-year high.

Mortgages will keep rising before peaking at 5% in the second half of 2024, according to the latest forecasts for the UK’s economy. The Office for Budget Responsibility said Thursday that mortgage rates will then stay above 4.5% through the first quarter of 2028. Higher borrowing costs are expected to feed into UK house prices, which the OBR forecast would fall by 9% over the next two years.

Barking and Dagenham is the London borough with the lowest mean salary, with residents earning less than £30,000 a year on average in April 2021, according to census figures published this year. But an influx of new developments, including the capital’s largest film and television studio opening next year, may help to push up average wages.

The number of people moving to Barking increased by 17% between 2015 and 2019, with around a fifth of these movers aged between 25 and 29, according to a report by Knight Frank, citing ONS data. The creation of thousands of new jobs is likely to increase the population further, the report said.

“When the market gets tough, people still need to buy and find somewhere to live,” said Jeff Vedgen, manager at estate agent William H Brown’s Barking branch. “This area has seen such a good growth rate because it’s one of London’s most affordable boroughs, and you can’t get closer into the city and buy a house for this price.”