London property slowdown means investor opportunities
Owning a home in the UK capital could become more achievable in coming years, as house prices are now rising at their slowest rate in almost five years.
New data from the Land Registry shows the average London home increased by just 3.7 percent in the year to February, with the average property cost standing at £474,704.
Additionally, London’s property prices are rising more slowly than anywhere else in the country - nationally, prices rose by an average of 6.3 percent last year.
What’s more, in four London boroughs prices are actually falling. In the last year, prices in Tower Hamlets dropped by 2.9 percent, in Brent by 2.3 percent, in Islington by 2.3 percent and Hammersmith and Fulham by 0.2 percent. The only London boroughs to see price growth in double digits were Havering and Kensington and Chelsea.
London’s most expensive property is also experiencing a slowdown, which can be attributed to a stamp duty increase and economic uncertainty. The latest data suggests this trend is spreading across the capital.
However, some experts believe the slowdown isn’t a slowdown - merely an adjustment, citing a general upward trend. London and South East prices are far higher than the rest of the country, and some believe the property market in these areas is simply realigning itself with the rest of the UK following a higher-than-average level of inflation.
UK economy: Brexit-proof?
However, despite the slowdown and the potential volatility of Brexit negotiations, UK property is expected to continue rising in value.
A report from the Centre for Economics and Business Research predicts the average British property price will increase by £52,000 by 2021, a rise of 23.5 percent over current prices. This is due to property shortages in the UK, which guarantees sustained demand which in turn means strong returns for investors over the next few years.
CEO of online estate agents HouseSimple.com says the UK property market appears to be “Brexit-proof”.
“It has coped remarkably well with the economic turmoil in the months following the vote to leave the EU.” He added that while buyers are taking longer to commit to purchases, reservations will start easing now Article 50 has triggered.
“It wouldn’t be at all surprising if house price growth beats expectations this year.”
The report also noted that there will be a rise in demand for UK property from overseas investors, as the fall in the value of the pound means investment is more affordable than ever for buyers dealing in overseas currencies.