London house prices rose by 251 and 209 per cent respectively during Thatcher’s and Blair’s time at Number 10 - but Theresa May’s reign “could be marred by Brexit” according to an analysis by London agency Stirling Ackroyd.
Research by the firm reveals that the average London home cost £31,370 in 1979 when Margaret Thatcher entered Downing Street. Just 11 years later, this had soared to £110,110 – meaning a cumulative increase of 251 per cent, equivalent to a 12.1 per cent rise each year while she was Prime Minister.
Tony Blair similarly saw the average property in the capital go from £108,620 in 1997 to £335,040 some 10 years later. Annual house price growth in the capital averaged 11.9 per cent during his premiership between 1997 and 2007.
“There’s always talk of spiralling house price growth in the capital but compared to the 1980s, the rate of growth [now] is lagging behind” says Andrew Bridges, managing director of Stirling Ackroyd.
“Even the boom years under Blair couldn’t keep up with this pace of growth. Under New Labour, London’s property market reached new heights and became a global competitor. As demand soared, so did prices. Places like Shoreditch became solid investments and a buy to let surge started, with those properties snapped up still returning a profit today” says Bridges.
However, Stirling Ackroyd’s research shows that London prices dropped 1.4 per cent between Thatcher and the end of John Major’s premiership. In 1991, the average London home cost £110,110, dropping to £108,620 at the time Major left office – but economic downturn prevented buyers from taking advantage.
Likewise Gordon Brown, who inherited a sharp global recession from Blair’s tenure, also experienced negative house price growth during his time as PM. When he entered office in 2007, £335,040 secured a London home. By 2010, the average was £332,720.
David Cameron’s tenure - despite much talk of austerity and downturn - the price of a London increased by 53 per cent “as London property became a safe-haven for international investors” according to Bridges. In 2010, buyers were paying out £332,720 for the average London property but this has since climbed to £507,880 in 2016.
But he warns that it is highly likely that Theresa May could face a static property market during her term in office which, Stirling Ackroyd warns, “could be marred by Brexit.”
“The City’s property sphere has been pushed to its limits with new legislation and political events in the last [period]. But there’s a new advantage: London’s property market is more resilient and probably the safest real estate investment globally” says Bridges.