Bargain Time For London Buyers?
When considering the issue of property prices, it is a given that there is a premium on homes in the capital city compared with other parts of the UK. Nonetheless, the way the London market has performed in recent years has at least provided some relative bargains.
London homes remain more expensive than any other region, but the last few years have seen price growth below any other UK region, driven by factors such as the pandemic and a desire to be out of the crowded city and in the wide open spaces of the countryside when the pandemic hit.
Data demonstrating how this has manifested itself emerged this week from estate agency Hamptons. Outlining figures for people selling property in London and moving out of the capital, the typical seller made a gross profit of £197,730.
This figure told two stories. The first was that it was the first time since 2015 that the average seller in London gained less than £200,000 gross from selling their home, an indication of the relative weakness of the capital’s market in recent years and a sign that there are comparative bargains to be had.
At the same time, however, the profit made was higher than any other region of England and Wales, demonstrating the higher overall value of London property. Moreover, the typical seller made a profit in 91 per cent of cases, partly due to an average ownership period of over nine years.
This can be seen as a clear demonstration of the long-term value of investment in London properties, notwithstanding the short-term dip.
Looking forward, some may be optimistic that a post-pandemic, post-Brexit London will reassert itself. However, not everyone takes this view. In an article on the topic, Investors Chronicle called the prospects for London house prices “shaky”.
A key reason for this was the view that rising prices have stretched affordability to its limit, so there is a natural ceiling. However, if this does turn out to be the case, it does hold out the prospect of buyers being able to enjoy the benefits of less price inflation, especially if they plan future purchases.