House prices in London’s East end have exploded since planning laws were softened in 1987, with the total value of homes in Hackney rocketed by 864 per cent to £57.8 billion ($95.9 billion).

House prices in London’s East End have exploded since planning laws were softened in 1987, with the total value of homes in Hackney rocketing by 864 per cent to £57.8 billion ($95.9 billion).

The gentrification of East London has also caused Hackney’s surrounding boroughs to soar, with Tower Hamlets and Southwark rising by 684 per cent and 668 per cent respectively,  as seen in data reported by Stirling Ackroyd.

The growth of East London’s housing prices has outpaced Kensington and Chelsea, pipped to the fourth highest increase with 661 per cent since 1987. Of course, in monetary terms it outshines the East London boroughs, with residential property worth £102.1 billion, expected to grow to £138 billion by 2017. Westminster also experienced a 661 per cent growth in house value in the past 27 years.

“As the capital’s economic and cultural heart grows outwards and eastwards, the City fringes are demonstrating the greatest dynamism,” said Andrew Bridges, managing director at Stirling Ackroyd.

As of June 2014, the average house price in Greater London was £440,00, compared to £545,00 in Hackney and £1.28 million in Kensington and Chelsea. According to Nationwide’s House Price Index for August 2014, the average price for property in the UK was a mere £189,306 in comparison.

Prior to the planning law liberalisation in 1987, housing prices in Greater London stood at £98,700, which have increased 345 per cent in the 27 years since. In total, London’s residential property is now worth over £1.5 trillion.

Stirling Ackroyd attributed East London’s growth to both infrastructural and cultural impetus. The Docklands Light Railway and City Airport were both opened in 1987, while the inflow of workers from the creative industries helped shape Hackney as “the threshold of London’s future”.

It has been argued that the influx of nouveau-riche bankers and lawyers flocking to these newly-established “trendy” neighbourhoods drove rent prices in these boroughs up significantly.

The firm found this reflected in the household dynamics in Tower Hamlets, as the average house was comprised of 2.51 people. This was a drop from the 2.61 average in 1987.

“Wealthy professionals in places like Tower Hamlets and Chelsea have led to smaller households in these areas, and we’ve seen this change reflected in the average number of bedrooms in new-build developments,” Bridges said.