Press

"Stagnant house prices in December and falling transactions capped a fairly dismal year for the national housing market. Economic uncertainty and fears over job losses have reined in home moves in many parts of the country, and undermined prices outside London. But there are indications to suggest that 2012 may be more encouraging for buyers. Mortgage lending has been steadily improving as lenders learn to operate in a more constrained financial environment, and for those with deposits, rates are actually cheaper than a year ago in many cases. With the stamp duty holiday set to expire in less than two months, activity should pick up in the short-term as determined first-time buyers hurry to complete."

"While London hasn’t been totally immune from the difficulties facing the wider economy, would-be buyers have a greater confidence in the direction of the market. Strong interest from international investors and domestic cash buyers, combined with a limited supply of prime property, has helped property in the capital defy the national trend of house price falls. While the underlying lack of properties coming onto the market may stop activity in the capital from rocketing up, the appetite we’ve seen from buyers in January bodes well for vendors in the coming year. For instance, when the sale of a property in Fulham fell through during the festive period, it received 20 viewings and 7 separate offers in the following ten days - before selling for £20,000 above its agreed asking price. With such competition for homes in the capital, there’s no reason why price rises will judder to a halt any time soon."

"At a time when inflation and lethargic wage growth is taking its toll on household budgets, rock-bottom mortgage rates have provided a real financial fillip for both homeowners and buyers with big enough deposits. With interest rates unlikely to climb in the next year, we shouldn’t see lenders significantly driving up their mortgage rates any time soon - and borrowers should be able to enjoy incredibly low repayments for some time yet.  As rents rise, for many it makes excellent financial sense to buy rather than face higher rental costs each month. For prospective buyers who have been sitting on the sidelines, there is a real window of opportunity to invest in bricks and mortar while rates are cheap."

"Halifax's latest figures indicate that the national housing market is still reeling from the effects of a sluggish wider economy. Lethargic wage growth in comparison to inflation and a deteriorating labour market is weakening purchasing power and holding back buyer demand outside of London. But it’s not all doom and gloom. More positive noises are coming from the mortgage market, which saw mortgage approvals hit their highest level in 23 months in spite of the unfolding eurozone crisis. If lenders continue this trend, we may see a modest improvement in the coming months in both housing market activity and prices as first-time buyers look to move at pace to buy before the end of the stamp duty holiday in March.

"In London, the direction of the market is much clearer. While City bonuses may face pressure this year, we are already seeing growing demand from European investors looking to buy assets that are more insulated against the eurozone crisis. With cash buyers and those with substantial deposits looking to find a safer bet than the stock market, central London will continue to outpace the wider UK market by a distance."

"Rock-bottom interest rates have helped sustain demand, driving an improved mortgage market in recent months. However, the increased commitment from lenders in the latter part of the year is encouraging to say the least. While we are still a long way from the level of lending seen before the downturn, given the lack of vitality in the UK’s economy and the ongoing eurozone crisis, any improvement in mortgage lending is a welcome bonus.

While the CML holds a more negative outlook for the national market in the coming year, we anticipate another encouraging performance from London’s housing market. In the last month alone, we've seen a 21% annual increase in the number of properties placed under offer, as a committed corps of wealthy international and domestic buyers look to move money from more volatile investments into the capital’s bricks and mortar. As the debt crisis in Europe continues in the New Year, we expect this trend to continue, helping drive activity in prime London in 2012."