Research reveals structural impact of pandemic on London property 

The pandemic has left a “structural and lasting impact” on London’s property market, Chestertons claims.

Analysis of Land Registry data by the London agent found the value of houses in the capital has increased by over 20% since the outbreak of Covid in February 2020, while flat values have fallen slightly.

According to Chestertons, the average price of houses sold across London has increased by 23.4% since February 2020, while the average price for flats has fallen marginally by 1.6%. 

The agency believes that this is the first time there has been a sustained and opposing split in how prices for houses and flats have moved in more than two decades.

The research found that houses made up 47% of London property sales in February 2020, rising to 52% in September 2022 and 54% a month later, suggesting the ‘race for space’ and desire for larger homes has continued.

Sebastian Verity, head of research at Chestertons, said: “The first lockdown in early 2020 rapidly increased the demand for houses as more people worked from home and needed larger properties with outdoor spaces. 

“It is now clear that this trend has continued in London; houses are growing in value quicker than flats and making up a larger proportion of the market than before the pandemic.”

He said research from the Bank of England1 supports this view as it found almost 40% of the growth in house prices between January 2020 and December 2021 had been due to an “increase in households’ … valuation of houses over and above the valuation of flats”.

Verity added: “These figures offer strong evidence that Covid has now left a structural and lasting impact on the capital’s property market."