Tuesday, 20 March 2018

House prices in London up £4,000 in a month but annual prices skip traditional spring surge

Londoners reluctant to lower their house price growth expectations are opting to stay put instead of selling up.
London asking prices increased by £4,000 between February and March 2018, a monthly rise of 0.6 per cent.

However, homeowners remain reluctant to put their homes on the market as year-on-year asking prices continued to drop for the seventh month running, defying the traditional spring sales surge.

New seller numbers were three per cent lower this month than they were a year ago, at a time of year when homeowners usually rush to put their properties up for sale.

This is because house prices in the capital remain subdued, with the average London asking price 0.6 per cent lower than in March 2017 at £632,000, according to property website Rightmove.

“With an annual rate of price decrease as opposed to increase being a constant factor for the last seven months, it is bound to be a deterrent to some potential sellers,” said Rightmove director Miles Shipside.

“Even though fewer properties are coming to market, the slower rate of sales means stocks of unsold property are growing, leading to subsequent downwards price pressure.”

This is good news for buyers, because it strengthens their bargaining power, said Shipside, but they will also have a smaller range of property to choose from as homeowners hold off selling.

However, a separate report by the Royal Institute of Chartered Surveyors (RICS) found that estate agents had a record low number of properties on their books.

This lack of choice combined with affordability constraints was also putting off potential buyers, with RICS reporting a drop in the number of new buyer enquiries for the eleventh month in a row.

London estate agents reported that sellers with realistic price expectations were more likely to find a buyer for their home in the current climate of political uncertainty.

“Uncertainty remains due to Brexit and transactional costs, particularly in the upper tiers of the market, although the right stock will sell when priced competitively,” said James Perris of De Villiers Chartered Surveyors.

London’s best-performing borough was Bexley, where the average asking price was £409,400, up three per cent on the same period in 2017.

The south-east London borough stretches from part of Abbey Wood, where a Crossrail station is due to open this autumn, down to Sidcup, which has become a first-time buyer hotspot thanks to its relative affordability and half-hour commute to central London.

Hounslow, which stretches from Chiswick to the borders of Heathrow airport, saw the second highest percentage price increase, rising 2.6 per cent in a year to £562,000.


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