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“These people are leaving friends
(in London) in order to find a home they can afford, and in many cases, schools for their children”
The view from our London office Bob Bickersteth and
Milly English
To have a strong economy, the country needs to have a fluid property market allowing first time buyers to be able to buy, and people to move up
the property ladder, as their circumstances change. Our economy is intrinsically linked to a healthy and affordable property market. I wrote in the spring edition that despite the political surprises over the last year, the first increase in the base rate for 10 years and seemingly, never ending Brexit negotiations, both the UK economy and the property market across the UK has shown demonstrable resilience despite a slow down in London.
The market has continued to stagnate in the capital and according to the latest data from the Office for National
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Statistics the average value of a home in London was 0.2% down year on year (national average house prices climbed 3.2%). It concluded that the dramatic slow down, compared to the rest of the country over the last two years, may have been because the capital was “particularly affected by a fall in net EU migration and wider uncertainty following the Brexit referendum result in June 2016.”
Demand for realistically priced properties up to £1m is strong but lacking in supply, and the reverse is true over this figure. Although there are tentative signs that the pendulum is swinging back, with more properties coming to the market at the lower end, and demand increasing at the higher end.
After a long period where prices rose
faster in London than elsewhere in the UK, a period of under-performance was to be expected. The rapid shift from a sellers’ to a buyers’ market has meant price reductions, which has in turn led to greater demand.
Some sellers have also refused to accept that house prices are under pressure. So instead of settling for lower offers, they are opting to take their homes off the market. The internet has enabled extensive data, not just about the property but also the surrounding area to be readily available to potential purchasers. As a result, they are not willing to even view a property if they think a vendor is not motivated to sell at a realistic market price.
The market outside London has been much stronger over the last two years.