Peter Rollings commenting in response the latest figures from the Land Registry
Mon 30 Apr 2012
"The national housing market started the year strongly, but some of the shine has started to come off as mortgage lending conditions worsen. Early year lending and buyer activity was buoyed by demand from first-time buyers moving before the stamp duty deadline, but banks nervousness over the eurozone crisis and its impact on funding costs has begun to rein in their lending to new buyers. This cautious approach is unlikely to be reversed in the immediate future given the announcement of a technical recession, which could also dent some buyers confidence outside London. On the other side of the coin, the recession pushes the prospect of an interest rate hike out of sight, which will help support house prices in the long-term and prevent many homeowners mortgage costs from moving too far from their historic lows.
"The budget and the deteriorating mortgage market cast a long shadow on much of London in March. Concerns over a possible mansion tax or other property tax penalties dampened buyer activity, with many adopting a wait-and-see approach in run up to the budget, while the introduction of the 2m tax threshold triggered a flurry of haggling and hasty changes to buying budgets. But Londons market is not uniform. It is a collection of smaller markets. While sales prices may been more severely knocked in other parts of greater London, prices are still rising in the most sought-after prime markets, even after the impact of the budget. Central Londons bricks and mortar has long been the first port of call for investors - whether from the UK or abroad - looking to guard their wealth against economic uncertainty. This will perpetuate demand for the limited stock of quality property in prime London, driving a larger wedge between Londons market and the rest of the country."