This is never going to be a straightforward question to answer, as there will be a different story depending on which London borough you’re focusing on. But in London’s most expensive boroughs, which have seen exponential price rises in recent years, the tide is turning, and prices are falling. Prices are falling generally across London, yet growth can be seen in other parts of the country.
Overall, the sales market in London has slowed. Asking prices have been dropping, which is discouraging some potential vendors from putting their properties on the market. With fewer properties on the market, there is less choice for buyers. This, compounded by issues of affordability, means there are fewer new buyer enquiries.
According to the February 2018 Residential Market Survey from the Royal Institute of Chartered Surveyors (RICS), property market activity remains sluggish, with fewer new buyer enquiries and completed sales. RICS also reported that average stock levels among estate agents are low, while warning that house prices in London may fall in 2018 as the overriding sentiment is one of caution.
However, vendors are still achieving sales, but are more likely to do so if they set a realistic price for their property. And according to Rightmove, asking prices for properties in London rose in March.
Demand for rental properties in London continues, yet there has been a slight fall in the number of new properties for let coming onto the market. Supply has dwindled, but demand remains steady. This has led to forecasts of possible rent increases during 2018, placing further pressure on tenants.
Landlords are also exercising caution, as they have had to contend with a variety of changes to tax and regulation in recent years, including mortgage interest tax relief. There have been reports that some landlords with smaller portfolios may choose to exit the market, which could exacerbate the supply shortage. A recent survey from ARLA Propertymark revealed that 59% of lettings agents expect rents to rise this year, while 19% expect rents to fall.
What can we expect?
The property market is still being affected by the general uncertainty surrounding Brexit. Until there is greater clarity over what kind of deal the UK can secure, it is likely the London sales market will remain unchanged or slow, with property sale price rises likely to be lower than rent rises.
So, there may be more movement in the rental market, with rental price growth potentially outperforming sales growth. With no sign that demand for rental properties will wane, it is likely the rental market will grow. As this happens, there will be a need for greater flexibility for landlords and tenants, and a push towards provision for longer, more stable tenancies, which will benefit both landlords and their tenants.
If you’re looking to sell or let a property in Barons Court or West Kensington, W14, and you need advice or a valuation, get in touch with us today.