Why a dip in London's house prices is nothing to worry about
Figures released by the Office of National Statistics showed that the average cost of a home in the UK rose 0.8% to just over £223,000 this year. The biggest increase was found in Yorkshire and the Humber, which experienced growth of 2.6%.
However, in London, according to official statistics for 2017, housing prices have not increased at all so far in 2017. Instead they experienced a 0.6% fall in value leading to the average price to drop £3,000 throughout the capital. The price drop is attributed to the financial uncertainty that is currently weighing down London’s property market due to good old Brexit.
To add fuel to this blazing fire of doubt, the current rate of inflation has risen above the current earnings growth, meaning that house buyers are feeling the squeeze and are less likely to make a move.
Now all this sounds pretty gloomy. But you can stop hugging your knees and rocking back and forth – this is all part of the housing market’s fluctuating charm, which when you understand it, shouldn’t have a negative effect on your sale.
While price drops may worry those of you looking to invest in London’s property market, it’s not a warning sign of things to come. House prices in the UK are fortunately still much higher than the peak they reached in 2007, just before the economic crisis.
If you’re aiming to sell a London property, then the supply shortage ensures a suitable appetite for demand if the property is positioned correctly. In fact, at LiFE Residential, we’ve achieved a 90% increase in completions for July and a 15% completion volume increase in August (compared with July and August 2016).
Josh Larn, LiFE Residential’s Area Sales Manager commented on what’s required to enable success in this market:
“Candid evidenced advice means the stock of our clients is re-positioned correctly, enabling market traction and ultimately sales. Too many agents are uncomfortable having these frank conversations with vendors. As always, it is the market that dictates values, irrespective of vendor expectations. A transparent, founded, real time, analytical approach is what’s required to be successful in this climate.”
Therefore, while waiting for the house prices to rise once more, wannabe London investors could take advantage of the popular rental market the capital can offer.
Josh Larn, LiFE Area Sales Manager
The monthly average rent for a studio apartment in areas such as Fulham, Chelsea and Poplar exceeded £1,000 a month according to data taken in July 2017. With rental properties constantly in high demand across the capital, this presents property investors with an opportunity to turn vacant homes into another source of income while they wait for the value to grow.
However, we know only too well that having to deal with all the paperwork and building management may be enough to put off those of you who want to invest in London’s housing market, especially if you’re located overseas. Luckily, there are other ways to manage a property that would require little effort on your part.
At LiFE, we are committed to delivering the best lettings and management service possible to deliver peace of mind to both residents and landlords. We would be more than happy to take the stress out of your property management experience.
While property prices throughout London may have dipped, the market remains incredibly strong. With an ever-present housing crisis, demand for property will continue to grow and once the uncertainty of Brexit is smoothed out and the UK’s future becomes clearer, housing prices throughout the capital should see positive growth once more.