Sep 2020 London house prices: Calm Down Dear!
Headlines of the day are all about surging property prices, particularly in London.
Today's Evening Standard is telling us that London house prices have hit a new all-time high as the remarkable post lockdown property boom gathers momentum.
The average cost of a home in the capital jumped 3.6 per cent in June alone to reach £490,495, almost £2,000 above the previous peak in July 2017.
The annual rate of increase almost doubled from 2.14 per cent to 4.25 per cent, according to Land Registry figures today. The biggest increases were seen in Islington, where they shot up 8.7 per cent year on year, Waltham Forest (7.3 per cent), Kensington & Chelsea (7.1 per cent) and Lewisham (7 per cent).
What is driving this boom?
The Stamp Duty Holiday + Lockdown syndrome + Significantly reduced prices from the heights of 2014 + very low mortgage rates = Boom
Also another factor impacting the market is stock availability. For years (after the previous Stamp Duty came into place) the property marked cooled down significantly as people could not trade up or down easily and this affected stock availability.
August saw the highest number of new listings in a single month since May 2011 and average prices are also up.
The question is if this is a boom or a blip?
As you know, we tend to give opinions based on facts and the facts are that sales are happening and actual prices paid do reflect the price increases.
Is this sustainable? We want to believe that this is more of a blip than boom… the full economic impact of the lockdown will only start to show in the coming months as the job retention scheme unwinds and unemployment rises. More importantly, the current Stamp Duty Holiday is set to end in March 31st.
But given that mortgage rates remain low and there is good availability at the moment, this maybe your chance to get that ideal London property you have been thinking of.
Just remember, calm down. To make the most of it, make an informed decision and better, get the right advice (ideally from an indepedent property consultant). There are many deals happening out there.
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