London’s top ‘recession-proof’ areas to buy a home

A dramatic drop in prices can leave homeowners in negative equity, where the value of the property is less than the mortgage on it, while falling home prices can make securing a mortgage more difficult and expensive.

Most experts still think that house price declines are an outside chance, but the current economic uncertainty shows no sign of disappearing anytime soon.

A recent Deloitte survey found that nearly two-thirds of financial leaders expect a recession in the next year.

With interest rates expected to rise further, research from fintech company Proportunity has explored the UK’s ‘recession-proof’ areas to help buyers insulate themselves from property market volatility.

How to Find a Recession-Safe Neighborhood

By analyzing 331 local authorities and looking at areas that did well in the last recession, the company has identified a set of characteristics to look for when buying property.

These include affluent areas with low housing supply, a high proportion of millennials (a sign of high economic activity), a high proportion of older properties and above-average properties.

The UK’s top three ‘recession’ areas are in London, while outside the capital South Gloucestershire is another area where prices are unlikely to fall. Other strong areas include Luton, Bracknell Forest in Berkshire and Broxbourne in Hertfordshire.

Where to buy in London

On the River Thames in Kingston

/ Daniel Lynch

Topping the rankings is Kingston upon Thames in south-west London, where the average terraced property sells for £765,686, according to Rightmove.

The former market town’s green areas and good schools mean it will always be a popular choice for families.

According to Peter Knowles, head of Hampton’s Kingston office, the data shows the region is generally immune to market slowdowns.

Knowles said a common reason families move is if there is no good secondary school after a child finishes primary school, but Kingston has great options for both age groups meaning there is less “churn”. And hence less stock is available.

He added: “In terms of other recession-proof areas, Surbiton is a great area for the same reasons and now more and more people have requested to come back to the office maybe 3 or 4 days a week. The train time to London is 17 minutes. Waterloo is a huge bonus.

Crouch End in Haringey, another ‘recession-stricken neighbourhood’

/ Adrian Lowry

Haringey in North London is one of London’s most sought-after locations, with the average terraced property selling for £825,136, and the average flat selling for £462,224, according to Rightmove.

Its flexible market is due to its many parks and green spaces, proximity to central London and upmarket areas such as Muswell Hill, Crouch End and Highgate.

According to Proportunity, London’s third highest location for ‘recession’ homes is Harrow in West London. Like Kingston, the area has good schools and is well connected to the city.

Hero

/ Daniel Lynch

According to Alex Woodley-Smith, managing director of AWS Prime, apart from these areas, London’s prime market is its own microclimate and is protected from economic fluctuations.

The prime market is likely to be more flexible than other sectors as many buyers are cash buyers and are therefore not affected by interest rates and volatility on the stock markets.

“Also, many of London’s key buyers are international buyers, so again, they are not sensitive to domestic inflationary factors and have diversified interests around the world.”

Woodley-Smith said London’s famous Garden Square properties were a good example of a “bulletproof” investment because of their historic and special architectural interest.

Vadim Toader, Proportunity CEO and co-founder comments: “Buying a home is an exciting and nerve-wracking time. Add in rising prices and economic uncertainty and the decision to buy or not to buy becomes more complicated than ever.

“Knowing the characteristics that make homes more likely to hold their value and the top areas of resilience is an easy way to protect your purchase. Whether it’s a recession, a pandemic or just uncertainty. , checking the boxes for the possibility of weathering an economic storm adds an extra layer of security to your new home.