Is the end of the London property bubble nigh?
As forecasts for the capital’s property prices over the next two years appear bleak, will vendors find themselves with unmarketable property due to a lack of interest?
While the capital has always been considered an area of prime real estate, its exponential growth over the last 50 years has gone beyond what many in the property market consider normal. From those who managed to buy a property in London while the prices were somewhat affordable, to foreign investors who possess the financial clout needed to outbid others for in-demand homes in the most exclusive locales, homeowners in the capital have so far been happy to benefit from its ever increasing house prices.
However, there are signs that the tide is starting to turn, according to new figures released by top London-based estate agency Savills. While the rest of the country has recovered relatively gracefully from the ‘hiccup’ known as Brexit, London homeowners in vicinities such as Knightsbridge, Belgravia and Mayfair have continued to see prices fall – a fall which started over 18 months before the referendum was even announced.
Suffering from huge property tax increases, along with high-rate buy-to-let mortgages and costly second homes, the elite are seeing their dominance in the capital’s property market begin to slip.
With a 9% fall in prices to date since 2014, many investors are starting to feel the pinch of negative equity knocking at their doors – and if potential home buyers continue to rest on their laurels as opposed to blindly and confidently purchasing houses, in the custom which London property selling experts consider typical, the capital could start to see its downfall earlier than expected.
For the most part, central London has been a target for wealthy foreign investors – but their unwillingness to continue investing in the period of uncertainty following the UK’s planned exit from the EU has understandably caused a slowdown in the market, further compounding the woes already being felt.
Savills believes that these areas will not see an increase in investment for a further two years, until the EU talks are complete and Article 50 has been triggered. But with the HS2 rail link undermining the necessity for city-centre living as well as the growing number of companies moving to cities with cheaper costs, will it be too late for London to recover when all is said and done?
Those who need to sell in London don’t need to wait to for buyers if they decide to use a house buying company, who would be willing to buy any house for cash regardless of the state of the market for competitive fees – and with prices continuing to fall, avoiding traditional estate agencies may very well be the best way forward.
Worried that your London home won’t sell? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.
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