Homeowners across London are showing cautious signs of shaking off the Brexit blues, with a renewed confidence in the market pushing up asking prices for the first time in two years.
The average price of a property in the capital stands at £617,94 — or 1.3 per cent more than in August last year — according to the latest Rightmove house price index, published today.
The number of London homes sold during the past month is also up compared to last year, by a significant 5.2 per cent, representing the biggest increase since July 2017.
The research contradicts last week’s UK House Price Index from the Land Registry, which showed sales prices down by 2.7 per cent in the year to June. However, these figures relate to deals being struck back in the new year and therefore do not necessarily present an up-to-date picture of the health of London’s market.
William Drey, a director of estate agent Jackson's in Tooting believes a lack of supply is driving price rises. “We are seeing a large number of first-time buyers in the market, particularly those who have been renting locally for many years,” he said. “This is causing a wave of second-time buyers who are selling their first properties, and they tend to be upsizing within the Tooting, Balham or Clapham area.”
Seasonal slowdown
Asking prices are down marginally (0.1 per cent) month-on-month but a drop is to be expected now that the summer holidays are in full swing. Last year prices dropped 3.1 per cent between July and August.“Some potential buyers have sat back and watched the price of property coming to the market in the capital falling year on year for the last couple of years, giving many of them little incentive to do anything but sit on the sidelines,” said Miles Shipside, director and housing market analyst at Rightmove, who described the increase as a “strong reason to be cheerful”.
“It’s always hard to spot the bottom of a market, especially in a massive place like London with its myriad local markets,” he added. “However … [if asking prices continue to rise] … buyers might decide to stop sitting it out before prices rise further. That could happen if we have more certainty on our Brexit outcome, and this annual price rise may be an indicator of more market activity to come.”
Marc von Grundherr, a director of London estate agents Benham & Reeves, believes the recent Tory Party shake-up that saw Boris Johnson replace Theresa May as Prime Minister might have helped both buyers and sellers feel more confident. “Having May sat there, almost paralysed, certainly did not help,” he said.
“Having a change in Government, and the feeling that, deal or not, we are coming out of Europe might have made people feel that there is no point in waiting and they have waited so long already they are sick of it.
“I think vendors are definitely more confident than they were a year ago and since there are few people who are really under pressure to sell, there is no reason for price cutting. Prices are certainly not flying, but I don’t see them falling either. We have seen a significant uptick in buyer numbers, and even investors are creeping back.”
Across London, homes in Zone 3 have seen the strongest asking price growth, up 2.8 per cent to an average of £576,709. There is also positive news in central London with prices up by 1.6 per cent in Zone 1 to almost £1.4million, and up 1.8 per cent in Zone 2 to almost £728,000. Growth was more muted in the suburbs, while Zone 6 prices are still falling — down 1.7 per cent year-on-year.
The best-performing boroughs were Southwark (up two per cent), Newham (up 1.6 per cent), and Bromley and Kingston upon Thames, both up 1.3 per cent.
https://www.homesandproperty.co.uk/property-news/house-prices-in-london-asking-prices-see-growth-for-first-time-in-two-years-a132806.html
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