Is Hackney's Tech City driving house price rises?

A new build apartment block towers over the derelict Woodberry Down Estate in Hackney. Photo by Jack Millner 

Figures from the Land Registry Price Index in February showed that house prices in Hackney are rising faster than any other London borough, with a 17% increase on last year's prices. 





Hackney is still nowhere near the most expensive place to live in London, with neighbouring Camden and Islington fetching higher prices, and Kensington and Chelsea topping the list of most expensive borough in which to buy a house in London with the average price over £1m. 


 
Kensington and Chelsea, and Barking and Dagenham, are included in these charts for context along with Hackney and its neighbours because they are the most expensive and least expensive boroughs to live in London respectively.

Let's take a closer look at Hackney. Below is a map of Hackney's wards. Darker green represents higher average house price. Click the wards to learn the average house price in that area.





Next let's look at the same map, but with percentage increase on last year represented instead. Click the wards to view the percentage increase on last year.



What is important to note here is that Hoxton, in the south west corner of Hackney, is shaded dark on both maps.

This means it is not only one of the most expensive parts of Hackney to live, but it is also getting more expensive faster than most other parts of Hackney.

So what is going on in Hoxton that is driving this price increase? Well, it could be its proximity to Islington to the west, the more expensive borough in terms of house prices, and its proximity to The City to the south, home of Britain's banking sector. 

Or it could be the fact that Hoxton is home to London's 'recession-proof' tech industry.

"Silicon Roundabout", Old Street's nickname in the tech community. Photo by Matt Brown on Flickr 

Here are some figures taken from a report by Tech City UK, an initiative launched in 2010 to support the growth of the technology sector in east London, published in December of last year:

"Between 2009 and 2012, the number of tech/digital companies in London increased 76%, growing from 49,969 to 88,215"

"27% of all job growth in London comes from the tech/digital sector..."

"...with approximately 582,000 people now employed by the tech/digital sector in London"

"Between 2009 and 2012, the tech/digital sector in London grew by 16.6%"

These figures, especially the figure highlighted in red, are huge - almost one third of all job growth in London comes from the tech sector, with its most dense cluster found in the same corner of Hackney as some of the most expensive houses in the borough and the sharpest price increases in London.

Graffiti in Old Street. Image by Nana B. Agyei on Flickr

It is important to note that a correlation does not necessarily indicate causation, but it is certainly possible that the rise of Hackney's tech scene is one factor among others contributing to rising house prices in the borough, a process sometimes referred to as 'gentrification'.

While there are tangible benefits to this process like job creation and house prices bringing a level of affluence to the borough that it has never seen before, there are also losers in this process.

Clara Jameson*, a local artist whose family has lived in Hackney for generations, is being forced to leave London after the council used a compulsory purchase order to redevelop the Coleville estate in Hoxton where she lives. 

"It's ironic that the very people who made the area interesting in the first place like local artists, are often the ones who get forced out when the prices go up," she says.


New build apartments shoulder to shoulder with derelict social housing, scheduled for demolition on the Woodberry Down Estate in Hackney. Video by Jack Millner. Click here for a longer tour through the area which is now the frontline in Hackney's gentrification process.

She believes that the estate has been allowed to become run down by the council, who plan to build luxury flats on the site worth half a million pounds. Many of the residents will be offered part ownership of one of these flats in exchange, but Jameson and others believe their homes are being deliberately undervalued, forcing many of them to leave London.

"One lady who's lived here all her life was moved out, and she had a nervous breakdown," says Jameson.

In February the average house price in Hackney was £502,129. But using data extracted from the estate agent Keatons current listings, the average asking price for houses in a Hackney post code is £528,189, which is £26,000 more expensive, or just under a 5% increase in that time alone.

Professor of human geography and gentrification expert Loretta Lees says the rise of high tech industry has had a gentrifying effect on the area. 

Graffiti in Old Street. Image by bixentro on Flickr 

"Gentrification has been percolating in Hackney for a number of years and it has now matured," says Lees. "Once these estates are demolished there's nothing standing in the way of the total gentrification of central London."

Lees says the effect of gentrification can negatively impact business as well as communities. "The winners and losers are different people. The winners are the developers and the local council, the losers are the residential community, but there’s also been significant retail displacement."

Below is a map of London's digital businesses, built using information from Tech City Insider, a directory of London's tech companies. Also included are the borough boundaries, so you can see which borough these companies are based in. Click on the red points to learn more about that company, and click on a green borough to learn the average house price there. See anything interesting? Let us know in the comments.

Company name

House price information for The City of London was unavailable from the Land Registry, and the average price for a house in Westminster is £863,496.


*Name has been changed at the request of the interviewee.