Fast forward to December and the picture is quite different. Sellers are not achieving the bullish
asking prices seen in the middle of year and buyers now have the upper hand, but are we in a buyers’ market just yet?
Rapid change in the market
It was not until September that we started to see a slowdown in the market. At first sellers were reluctant to budge anywhere less than the asking price having been told by their estate agents that everything from run down council flats to Georgian terraces were all selling 10% over asking price.
Come mid-October and sellers started to get over their denial that the market was slowing down and prices became visibly more negotiable.
As always the case in London though, market behaviour varies from area to area and price point to price point.
Price rises vary from borough to borough
Figures are yet to be released but come January figures are likely to show a significant slowdown in the prime central market for the final quarter. Only last week, Nationwide announced prime central saw a year on year increase of 9.7% versus the Borough of Lambeth’s 28% rise.
We are not talking about a drop in price just yet, but most certainly, the rate at which the market is growing has and will continue to see a slowdown.
The apprehension about the upcoming election is making some buyers a little nervous, especially foreign investors who see a possible change to a Labour government a risk to the top end of the market. With Ed Milliband’s tentative threat to regulate the rental market and impose some level of restrictions on foreign buyers, which seems if not unworkable, unrealistic given the revenue foreign investors bring into the country.
The stronger pound makes prime central assets less attractive than they were this time last year and overall, some buyers think prime central has reached the top of its current ceiling, and are waiting to see how the market performs before buying.
However, how many times have we heard that we’ve reached the top of the market, only to see another ten percent rise the following year? Too many times to count.
Whilst asking prices have not declined in most cases, prices have simply become more elastic. So we wouldn’t’ call it a buyers’ market just yet, but things are more in favour of the buyer now than they have been for at least 18 months. Whether this will be the same come new year is another story.