The London housing market shows resilience according to the CBRE Global Living report. According to CBRE Residential, investments in urban areas such as transport infrastructure, connectivity, retail, cultural centres and housing are key drivers of economic growth.
The coming Elizabeth line railway, that will stretch over 60 miles across London, will stop at 41 accessible stations and is expected to serve around 200 million people each year. This improvement in the connectivity of many districts will reduce journey times significantly.
The Help to Buy London scheme is set to be revised and continue for a further two years. The scheme is an equity loan provided by the Government. In the scheme, the government currently lend up to 40% of the cost of a new build home in London, so the purchaser will need a minimum 5% deposit and a 55% mortgage to make up the rest.
Currently Central London properties have an average value of £659,660 (according to the current Zoopla estimate at time of publication, these figures are subject to change) whereas the average for the rest of the UK is £236,619.
Why invest now?
As a large city, London has few areas where more properties can be built, therefore the lack of house supply will always be a factor in pushing house prices up in the long term. In the current market, many mortgage products are available plus interest rates are at a historic low so it could be viewed as a very good time to invest. London also has a large and growing rental population, with private renters currently making up 28% of the city’s households.
Sellers are realising that if they want to progress they are going to have to offer a discount. The current economic climate means that there are many reasons why people are putting off buying.
Today, buyers are in a strong position. The biggest savings can be made in the highest-value areas such as London, where house prices have been falling and transactions have been low for the longest time. This is reflected in data by LonRes, which shows that the number of properties going under offer in the second half of last year was 6 per cent higher than the same period in 2017.
As an example of small signs of recovery in the London market, the average price for property in Islington (London Borough) stood at £794,100 in May 2019. This is a rise of 2.17% in the last three months (since February 2019) and rise of 12.07% since 12 months ago. (according to the current Zoopla estimate at time of publication, these figures are subject to change.)
Henry Knight from Springtide Capital commented:
“Clients who may have delayed for a year or two waiting for clarity, are unlikely to be willing to delay further. With mortgage rates close to historic lows, buyers across the country are getting back to business as usual and are re-establishing the search for their dream home.
With house prices in London still down from their peak, this represents a good time to buy.”