Breather for Buyers in London as Prime Property Market takes a "Pitstop"
Tue 30 Sep 2014
While ordinary Londoners struggle with a protected housing crisis, things are rather more sedate in the prime market as price rises flatten off after a "robust" 11.4% climb over the last 12 months.
Prime London house prices will remain stable until the end of the year, according to the latest London Property Monitor from estate agent Marsh & Parsons, with the slowing of price rises described as a "pitstop" by its chief executive, Peter Rollings.
"We've reached a plateau in the course of house price growth, and the path paved out for London property prices for the rest of 2014 looks to be levelling off," he said. "This isn't terminal, but just a necessary pitstop in the
long-term growth and sustainability of the market. And it doesn't mean we're in for a quiet winter either. Sales will
continue, albeit at a more 'normal' level, as buyers revel in the greater choice on offer, and without the frenetic competition many faced at the start of the year. With more realistic pricing sellers are prospering too, and on average 98% of the asking price is currently being achieved on properties sold."
Over the last 12 months, according to the Property Monitor, prime London property values experience a "robust" 11.4% climb, equivalent to 163,973. But there has been a sharp drop in the rate of quarterly price growth across the capital, and prices are predicted to flatten until the end of the year.
The average prime London property has risen 0.5% in value over the course of Q3 2014, less than a sixth of the 3.1% rate witnessed in the previous quarter as growth tails off into a more "sustainable trajectory" than at the start of the year.
House price rises have been steadied by rising supply of prime London property on the market, up 13% in the last three months. This has cooled the level of competition in the market and the number of registered buyers per available property in prime London has fallen from 24 at the start of 2014 to 12 in September.
"In the hubbub surrounding the property market recently, seasonal patterns have been lost in translation. The majority of house price growth typically falls in the first half of the year, so this autumnal re-calibration is nothing new. Price growth may have paused to catch its breath, but come January we expect the heartbeat of the property market to quicken again as growth awakens for another healthy year," Rollings added.
"But as thoughts fast-forward to May and electioneering ramps up, caution will be exercised by many homeowners and would-be investors, as high-end property is marked out as a key battleground. Wading in with a 'mansion tax' threatens to douse the growth at the top tiers of the market, and in London especially, thousands of ordinary families would get swept up in its wake. Packaging it as a levy on 'mansions' is misleading - across the capital, it is tricky to find a home big enough for your average 2.4 family without a million pound price tag."