With the first UK lockdown finishing at the end of August, the property market, in general, began to flourish once again with buyers returning and London property prices rising.
According to recent new statistics from the Land Registry, the average cost of a residential home increased 3.5 per cent to £489,159, surpassing the previous property record of £488,527 as of July 2017. This was the fastest annual increase since April 2017 and means that the average price has gone up almost £17k.
Nicky Stevenson, managing director at estate agency group Fine & Country, said:
“The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July. A lag will mean any extra demand it created will not be seen in the Land Registry figures before the end of the year.”
Also commenting on the property situation, David Westgate, chief executive at agency, Andrews Property Group, said: “It’s no surprise average annual house prices in August were up on July, as they will have been driven north by the post-lockdown surge in demand.
“September is likely to see an even sharper upswing in average annual completion values as by that point we will start to see the impact of the stamp duty holiday announced in July.
“Now, in October, the market has started to cool off as lenders grow more conservative and higher loan-to-value buyers struggle to secure mortgage finance.
“As we enter the winter months we’re expecting to see a lot more activity from landlords and people who have decent equity in their homes as we transition to a buyers’ market. Cash rich buyers will sense an opportunity and act accordingly.”
How lockdown and Brexit could impact London property prices
Younger investors in London are potentially about to make an investment with those looking at improving life at home while working. The government’s stamp duty holiday is also an added financial incentive.
However, would this spur investors to buy a first home or invest in a new home?
The UK is facing another phase of uncertainty and that is with Brexit. Will this dampen house prices after a promising recovery? Perhaps. A no deal Brexit might trigger price fluctuations for basic goods and services which could affect how people pay for mortgages. However, no expert can truly predict what would happen in January.
Mathew Loach, the regional director for London at Yopa, warned that the result could be “an immediate and drastic short-term slowdown in the market”.
What about House hunting Now?
Andrew Groocock, regional partner at Knight Frank, thinks buyers may as well get on with their search. “We are currently in a very balanced market, the likes of which we haven’t seen for a number of years,” he explains. There is essentially no harm making a start to finding your ideal home or investment.
But when will be the perfect time to buy a property?
“There is never a perfect point to catch the market as there are always unknowns, potentially positive or negative, so it really depends on your own personal circumstances,” comments Dominic Agace, chief executive of Winkworth estate agency.
House buyers and investors are advised not to be rushed into buying and make sure that the investment suits all your needs. Don’t set deadlines to buy or get into a bidding war. There are lots of similar properties within London to choose from so investors are advised to take their time.
Will Prices crash in 2021?
Most property commentators state that prices are going to grow gently over the next few years. Particularly after a difficult 2020, it is all we can expect for now.
Knight Frank forecasted that London property prices shall increase 15 per cent by 2024, while Savills thinks they will go up by 12.7 per cent during the same period.
Overall, London property is always going to be a great opportunity for investors. It is always expected that London will outperform the rest of the UK and is a relative safe haven for investment returns. After news of an effective COVID vaccine, normality will return to London quickly and all of its fantastic investment opportunities and exciting lifestyle shall also return in abundance.