Our latest property market update covers everything from what you need to know about mortgage rates, to 10 years of growth in London house prices, and how the ULEZ might affect the value of your home.
London Prices Seeing Slowest Growth
Headlines have been reporting that the London property market has seen a much smaller increase in prices than elsewhere in the UK recently. However, the market still delivered a ‘full house’ in October, with record high prices in every region. On average, prices have risen by +£5,983 on the previous month – competition between buyers is still high as the supply of housing remains sparse. However, there are still good opportunities for some buyers, with many London postcodes seeing prices slower to increase, and in some areas, such as South West London, the change in average price has been -3% on last year.
Looking at the bigger picture, prices in London have risen particularly steeply over the past decade, with North East boroughs like Hackney and Waltham Forest seeing prices rise by over 100% since 2010. With record high house prices now outstripping wages in over 40% of the UK, slower growth in London house prices could come as a relief to those trying to move up the property ladder.
Consequences of the budget
With many of the Autumn budget measures already unveiled prior to the official announcement, property professionals have already had time to react to many of the measures.
Key takeaways include £1.8 billion set aside to develop housing on brownfield sites, which is positive in light of the huge levels of demand from homebuyers currently outstripping supply, especially in London. However, some experts are sceptical, saying the new properties are unlikely to be ready in time to tackle the current issues in the housing market, and that, with 36,000 hectares of brownfield land in England – enough for 1.3 million new homes – the current allocation of 1,500 hectares is simply not enough.
The government also reiterated its pledge to build 180,000 affordable new homes, and has allocated £24 billion for housing, although it is not yet clear how and where this money will be spent.
Aprill Barry, a Residential and Commercial Property Associate at Laurus, gives her advice for those looking to make a move, and might be unsure how to proceed.
“The promise of more affordable housing will be good news for those looking to buy or invest in the next few years. For those looking to buy now, there are still good deals available, but with levels of competition still high, it’s now more important than ever to have a proactive team around you to secure your purchase at a good price and minimise risk.”
“Equally, with inflation predicted to rise by the OBR, acting quickly – whether on a remortgage or a step up the property ladder – to secure lower mortgage rates might be the better choice for many clients. It’s important to use a solicitor who can strike the right balance between turning a deal around quickly and doing everything they can to protect your interests.”
ULEZ – impact on house prices
With the expansion of the Ultra-Low Emissions Zone across London in October, the cost of living for those with more polluting vehicles will now be higher, with a £12.50 per day charge when driving across the city. However, some experts believe that this will only contribute to rising house prices. With pollution being a major push-factor for many house-hunters in London, it is predicted that the expansion of the clean air zone could accompany an increase in demand.
The Office for Budget Responsibility has also reported that mortgage rates are likely to rise, and that the biggest rate rise will come in 2023. They have predicted inflation will rise to 4% next year, and in response, the Bank rate will also rise, although it is not likely to go above 1%. Mortgage rates have already started to increase slowly in response, and it seems unlikely that mortgage rates will remain as favourable as they are currently for very long.
We spoke to Sarah Dormer-Thomas, a mortgage broker and partner at the John Charcol Network, about her thoughts on remortgaging. You can read Sarah's advice here.
If you are looking to make a move in the property market yourself or would like to speak to our property team about referring a client, please don't hesitate to get in touch on 020 3146 6300 or email@example.com.
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