Halifax does not tell the London story
Thu 07 Oct 2010
Peter Rollings, managing director, Marsh & Parsons comments: "The Halifax claims that house prices have declined by 3.6% in September and are up by just 2.6% on an annual basis. This is not the story of London.
"At the start of the year I wrote an article predicting house prices in the capital would rise by 5-7% and I am glad to say that this is currently the case. Halifax is one lender and relies on a small and volatile sample of mortgage approvals and takes no account of cash buyers or other lenders in the market. A much better indication of how the market is performing is in the Land Registry figures which show the market having risen by 6.7% nationally and 11.4% in London in the last year."Large areas of London, particularly Kensington and Chelsea, Knightsbridge and Holland Park, attract many foreign buyers and UK residents in no need of a mortgage and whilst prices have undoubtedly reached a plateau they are not on a downward trajectory. "That said, I believe if the recovery continues as it is and if mortgage lending returns to some sort of normality (and that is not the madness of 2006/07) we will see house prices in London rising by around 5% in 2011 because income from property including capital appreciation is currently providing an excellent yield of around 9%. (gross)."
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