The Race for Space – Is It Shifting Into Reverse?
If I’d said 18 months ago that the region’s most popular with buyers on property websites would be south west England and Wales, and that the Halifax index would show part of Cornwall with a 48 per cent annual house price rise, you’d have laughed – and rightly so!
Yet, thanks to the pandemic, what was impossible in 2019 actually did happen in early 2021. Even now the Nationwide, another index, says average house prices across the entire UK have risen almost 11 per cent in the year to May.
That’s good for sellers and tough for buyers, especially those struggling to raise a deposit or secure a mortgage. It’s left many asking ‘should I buy a house now? and deciding now’s not the time’ But, for some, there might just be one unexpected silver lining.
Bucking the Trend
While much of the country has seen property prices soar, London – usually in the vanguard of any buoyant market – has been on the back foot.
House prices in inner London are up just 0.3 per cent over the past year according to Zoopla, with prices actually falling in several boroughs including the City of London, Kensington & Chelsea, the City of Westminster and Hammersmith & Fulham. But, these are still far from the cheapest places to live in London.
In terms of price change and demand measured by searches on the website, London has been the UK’s weakest region for six months. In much of the capital, homes are taking two weeks longer to sell on average than the typical time taken between 2017 and 2019.
So, might now be the time to buy a bargain in the capital?
London House Prices
No one is saying London has become cheap in absolute terms. It’s still not the cheapest place to buy a house by any means! The average price is £482,576 says the Nationwide, and that remains just over twice the national average.
However, the gap between London and other regions is narrower than for several years, as last year’s buyers headed to the countryside. In addition, London’s market has a higher proportion of flats than other regions – and, again thanks to the pandemic, flats have been less popular for the past year or so.
However, these characteristics may be about to change, suggesting a London purchase at today’s relatively lower prices could be a shrewd move.
The City and the Flat are Back
The race for space changed what was meant by the best places to live, but Rightmove says buyers are slowly but surely beginning to return to traditional favourites.
So, while in the past year bigger family homes were the most popular type of property, this has now shifted to apartments: in terms of visits to the website, flats saw the biggest jump in demand between January and April this year, an uplift of 39 per cent.
The appeal of living in a city centre is increasing, too, with a 35 per cent rise in the number of city centre searches on Rightmove in April compared to January.
A Return to Normality?
No one can predict a pandemic exactly but as restrictions ease and more people return to offices, travel and socialising, so London may well return to being a strong property market. If so, anyone buying there right now might just find themselves with a modest windfall.
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Last Updated: September 22nd, 2024
