London has always been recognised as the driver of the UK residential property market and there is the little optimism in the capital at the moment. House prices have been falling at the fastest rate since 2009 in London with a rapid increase in the number of property listings being reduced in price. Property values fell 3.8% in the first quarter of the year compared to 2017A recent report by the Royal Institution of Chartered Surveyors said that most London surveyors/agents had seen an increase in the number of sellers withdrawing properties from the market.
With the average price of a London home standing at a healthy £430,000 (source: Halifax), affordability is becoming an increasing issue for buyers at a time of uncertainty and a greater reluctance to commit to a major purchase. Stamp duty increases and the prospect of higher interest rates have also contributed to a dampening in the market.
Elsewhere in the UK, prices have continued to rise since the beginning of the year with the south west recording an increase of 1.9% with an average property price of £237,000. There are generally however signs of a cooling in the market with most pundits now predicting that the market will remain broadly flat for the remainder of the year with much depending upon whether interest rates increase and the progress made on the Brexit negotiations.
Prices are clearly being sustained by a chronic shortage of properties on the market with the number of instructions having consistently fallen over recent months.
It seems that the biggest number of houses that sold below their asking price in April were in the highest price bracket. The Royal Institution of Chartered Surveyors said that 69pc of respondents to its UK Residential Market Survey reported that houses with a price tag of more than £1m were being sold for less than hoped. Signs of a softer market were spreading to lower priced properties too. The proportion of respondents saying that houses valued between £500,000 and £1m had sold for less than the asking price rose to 74pc in April from 56pc in January. By contrast the cheaper end of the market was holding firm.
In contrast to the picture painted nationally, we have found that the local property market is proving resilient particularly for properties less than £500,000 in value. Whilst the higher end of the market is proving more testing, we are finding that properties at the cheaper end of the market are being met with keen interest and, generally, sales are being readily agreed. In tune with the national market, however, the local market is price sensitive and it is key to market at a realistic price if interest is to be generated. Those who choose to market at an inflated price often are forced to reduce prices possibly losing out in the end.
The newspapers are always keen to report on the value of houses and whether prices are booming or crashing and recent reports have probably over egged the latest trends unduly influenced by the situation in London. Those considering selling or buying should always bear in mind that property purchases are a long term investment and it is much more important to address your immediate needs whether that be in downsizing, upsizing or simply getting on the housing ladder.
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