01 Oct London Property Market 2018
London Property Market 2018
With the words ‘Housing Crash’ on everyone’s lips we sieve through the gossip to look at the facts and what is likely to happen over the next few months. Are we on the verge or another market crash or is it just a case of Chinese whispers.
London property slump puts the brakes on UK house price growth Average price rise across the UK falls to 3% as the average house prices in London and rents also nosedived.
As well as price, we have also seen a slump in the growth of the UK market. as in June, we saw the lowest annual rate of growth in five years.
Across the rest of the nation, we saw prices increase by 3% from June to June which is 3.5% from May. This is the lowest annual rate we have seen since 2013 according to the Office of National Statistics. The cost of your average house now will set you back £228000, which is about £6000 higher than June 2017.
This slowdown seems to be hitting London the hardest as the capital fell at the fastest rate since the financial crisis. Rents have also dropped at the fastest rate in over eight years.
The ONS said the UK-wide dip in growth was driven by a slowdown in the south and east of the country. The Capital recorded the weakest reading across the country, with prices dropping 0.7% over the year to June, this is the lowest rate since September 2009, and down 0.2% in May. This is the fifth consecutive month that the houses prices in London have dropped.
It seems that the buyers and sellers are opting for the ‘wait and see’ approach when it comes to making a decision on what to do with their property. It seems
With the continued indecision surrounding Brexit and the final divorce settlement still months away, it seems property buyers are choosing to adopt a wait and see attitude towards the housing market. There seems to be a boom in the numbers of properties coming onto the market according to Rightmove, however, the number of buyers isn’t there to keep up with supply. So if you are looking for a quick house sale London then now definitely isn’t the time.
We blame the surge, on the increase in stamp duty (second tier), the removal of tax breaks for buy to let investors as well as the slow down in international buyers.
When Brexit happened we saw the pound fall and alongside that, we also saw
Despite an initial increase in overseas interest following the Brexit vote and weakening of the pound, we have witnessed international buyers take a step back from the sell house fast London housing market, ultimately contributing towards a decline in property prices.
We went for a long period of time seeing a massive shortage of properties on the market. Now, it seems that things have turn on their head and the market seems to be over saturated.
This has caused the sellers and agents to start to understand that you have been over eager with their pricing in today’s market. This has caused a 10% drop in prices to get them in line to attract buyers.
We are seeing first-time buyers hedging their bets that the prices will continue to fall and they may get a better deal in the long run and wit price dropping a further 4% in certain parts or the capital. So maybe they are right to wait?
This shortage of local buyers shows teaching us that the housing market is delicate. This is causing the confidence of sellers and landlords to dwindle.
There seems to have been a surge in homeowners putting their property on the market right at the end of summer. This seems to be depressing house prices, according to the biggest property website, Rightmove. With increased competition, it will tend to cause price wars as some vendors will want their house to sell first.
Rightmove saw the number of properties coming on to the market rise by 8.6% but there has been “no corresponding increase in buyer numbers to soak up the new seller influx”, Rightmove said.
Annual price growth slowed to 1.4% in July, down from 1.7% the previous month.
After a long period in which estate agents decried the lack of properties on the market, they have more on their books than at any time since September 2015. As a result, sellers are having to cut overly optimistic asking prices to find buyers.
Rightmove said: “The proportion of sellers already on the market that are reducing their asking prices is the highest at this time of the year since 2011, indicating initial over-optimism on price.”
Help to Buy Scheme
It almost goes without saying that the sell house fast London market has seen a positive move in the right direction for those looking to sell off their new build developments. With finance being more attenable due to lower deposits new build stock seems to be flying off the shelf. So where is the downside I hear you ask? The issues MAY come from two possible avenues.
Over-inflated prices – It may come down to simple supply and demand. With the average house price in the London sitting at £473000 that would mean that if a 40% deposit was needed then they buyer would have to stump up a £141900 deposit. So unless you are a Russian Oligarch or have raided the bank of mum and dad then it may seem unattainable. Step in the government and their Help to Buy scheme where you can purchase a home with as little as a 5% deposit and they will put in the other 40% (20% outside of London) for 5 years interest-free. This would mean that rather than stumping up 140k you would be expecting to raise a more palatable deposit of £23650. This lure that is pulling buyers towards new build seems to be hiking up prices as the average price for new build is up 2.9% to £514000. With these properties being more accessible we are seeing prices rise and in some instances, it is starting to show. As we mentioned in our previous blog we found instances where we found a 762 sq ft two-bed flat for £425,000 available through the scheme But just down the road a 1,330 sq ft three-bedroom house is up for £410,000. So are the only people making money, the developers?
Interest rates – The additional 40% that the government isn’t always interest-free, so when your 5 years is up could this cause you a problem? If the interest rates continue to rise then your mortgage payments once you have refinanced the additional 40%. If the market continues to drop then you may be sat on a 100% loan to value asset or even worse one that is in negative equity. Many are banking on the values increasing and the refinancing the growth, however, it could be a gamble. So if you are looking for a quick house sale London this time next year you may be waiting a while.
We are always interested in hearing your thoughts and views on the sell house fast London market so feel free to email us at [email protected]