For years now London has been the poster-child for booming house prices, with nary a day passing us by without headlines focussing on the ever-rising cost of first-time buyers getting on the property ladder. London has been at the forefront of a booming house market for nigh on a decade – but reports suggest that’s all set to change.
According to a forecast released by Savills, the global property consultant and estate agent, London house prices are set to stall in the capital. While prices elsewhere in the United Kingdom will see an average price rise of 2% – with the report suggesting that the North-East will see a 1% rise and 3.5% in Scotland – prices in London itself will remain static at best. In actual fact, in some areas of the capital prices are, surprisingly, going to drop. The wealthy areas of Knightsbridge and Mayfair will witness a 0.5% drop.
There are a multitude of reasons for this sudden downturn after nearly 10 years of sky-rocketing property prices. In part, it’s due to restrictions on lending, and a general wariness on the part of financial institutions as the country crawls out of recession. But, especially in the case of those wealthier areas of London, homeowners are waiting to see who wins the 2015 election after Labour has backed the Liberal Democrat concept of a ‘mansion tax’. The fear is that this tax won’t only impact on those who own genuine mansions, but also affect large family homes which have increased in value through no fault of the owners themselves.
It’s also down to people choosing not to live in the capital due to the already excessive prices for homes. Many are now choosing to commute from the East and South-East – and for that reason, Savills is predicting that prices in those areas will shoot up by nearly 20% over five years. Next year they believe the increase will be 3% – a record for the area. It’s a far cry from Savills original estimate, given at the beginning of 2014, of 8.5% inflation; they now suggest that 15% is a more likely figure.
In another shocking reveal, Halifax has stated that, according to their records, house prices have risen by only 0.8% – that’s the slowest quarterly rise since 2012. The upshot of these many price rises is that, in addition to a prevalence of what’s called ‘hutching up’ – or living with family members – rented properties will increase in popularity. Experts suggest that by 2020 nearly a quarter will be renting, compared to a fifth as it is today.
All of this, despite the fact that last month saw the grand unveiling of the tres-chic apartments at the old Battersea Power Station. Every single one of the 103 apartments have been snapped up, with prices starting at an eye-watering £600,000 – for upmarket property in London, this is, perhaps, not a bad price – but some industry experts reckon that some of the better apartments, penthouses for instance, could be sold for up to £30 million. This all follows news today about the most expensive properties in world – with four of them located in the capital. In addition to a former prep school in Kensington, the mansions of billionaires steel magnate Lakshmi Mittal and Chelsea FC owner Roman Abramovich were also included. However, no prize for guessing which London property was valued at £1 billion – Buckingham Palace, which also makes it global number one.
Getting a foot on the property ladder, or upsizing to a new property, can sometimes seem like a minefield – especially where cost is involved. That’s why here at Search Mortgage Solutions London we’re a professional mortgage broker in London who can offer you fully comprehensive and expert advice with no broker fee. Whether you’re buying your first house, moving to a new property, remortgaging or buying to let, we feel sure we can help you. For more information, please contact us on 0207 554 5685, freephone 0800 756 7794 or 0330 123 1077 free from your mobile and our experienced and knowledgeable staff will be happy to assist you with your enquiries. Alternatively, you can email us firstname.lastname@example.org.