let’s focus on property prices.
What happened in 2013?
- Official ONS and Land Registry stats are yet to be released but according to a number of large estate agencies and market commentators, the Greater London market saw a rise between 12% and 15% (Nationwide) in 2013.
- Boroughs of Hammersmith and Fulham and Westminster saw the fastest price growth, 20% and 22% respectively.
- UK growth rate of between 7.7% and 8.4%.
- According to Halifax and analysts Hometrack, the London property market dropped in December between 0.1% and 0.9%, with the largest falls coming from the prime boroughs. The Nationwide saw a rise during the month of December.
What do the ‘experts’ predict for 2014?
- Bank of England see 4% and 8% for the Greater London area, which seems bullish given the fast pace of growth in 2014 and their intentions to slow the market down.
- Savills predict just 3% for Prime Central but a healthier 6% for outer Prime Suburbs, like Hampstead, Putney and Chiswick.
- Knight Frank Research play it safe with a conservative 4% rise for prime Central London
What’s happening in the market right now?
Just this week we have seen a higher number of new listings come to the market for that normal for the 1st full work week of the year.
Will an increase in stock levels benefit buyers?
Since 2008, January has proved to be a slow month, often taking till week three or four to see any significant level of listings come to the market. That is not to say we will see the same stock levels of 2008. Rightmove announced this month there were 80,000 fewer London listings in 2013 than in 2008. Whilst a striking difference, 2008 was the year that investors unloaded stock in a rapidly falling market. A return to those numbers would slow the market down and possibly, we would even see a small dip. But the chances of that happening are remote given this occurred during a financial crisis and withdrawal of 90% of available mortgage products.
An increase in stock levels is good news for buyers. It puts you in a much better position to negotiate and ultimately, there’s more choice.
Our predictions for 2014
- Stock levels will increase 10% to 15% in 2014 giving buyers more bargaining power
- Growth will be slower than 2013 but prices in central London will see price increase 4% to 6%.
- Outer central, areas in zone 2 like Clapham and Shepherds Bush will see slightly lower growth between 3% and 5%.
- Top end of market, £5m+ will see much lower growth due to announcement of planned tax changes for foreign buyers.
- East London (Clerkenwell, Shoreditch, City) will outperform more central areas
Of course, we wouldn’t be the first ones to get it wrong on house price growth but as we have said before - it’s not when you buy, it’s what you buy.