It is not uncommon to see or hear media headlines regarding the London property market but in October 2017, there was something slightly different about the headlines regarding this market. This is because London house prices were falling, while the prices for property in the rest of the country were on the rise. Obviously this led some people to declare that the London property bubble had burst and that a new era was on the way but of course, things are never as clear as they appear with one set of figures in the property market.
For the record the figures released by Nationwide suggests that London’s average property price is listed as £471,761, which is down 0.6% when compared with the September 2016 figures. At the same time, the average property price in the UK rose by 2.2%, so the disparity between London and the rest of the country was on show.
When you are talking about the property market, for any location, it is always important to remember that there will be two sides to every story. A fall in house prices is initially good news for people looking to buy a home but at the same time, it is bad news for someone who is looking to sell property. This means that you cannot universally say that something impacting on the property market is good or bad because the outcome is likely to differ depending on your circumstances or status.
Many factors impact on London house prices
There is also the fact that when something changes in the London property market, other things change around it, which means that it is a continually moving issue. There is also the fact that there are external factors impacting on the market, and these play a strong role in determining what behaviour takes place in the property market.
When it comes to the London market, the most important thing at the moment is the fact that there is a shortage of properties on offer. There aren’t enough homes being supplied to meet demand, and this is a massive factor in the high prices. Even though house prices have dipped in our current standings, without a huge improvement in the level of homes supplied to the market, this is unlikely to be sustained.
Many people are looking for more affordable London house prices
You should also consider the impact that more affordable homes will have on the market. If homes are more affordable, more people are likely to look for a home or will find that they can now obtain a mortgage. This means that the level of demand looking for a property is likely to increase, which will likely lead to house prices rising again. Conversely, when house prices fall, there will be some property owners who decide that it isn’t in their interest to sell their home. If this sees the supply of property falling further, it will also lead to prices rising.
With this in mind, and all other things being equal, the dip in house prices in the capital wouldn’t be a long term thing. Of course, all other things are not equal, and with external factors like Brexit or the Bank of England’s actions on interest rates all likely to influence the market in the upcoming months, it would be wrong to make a definitive statement on what is likely to happen in the property market in the near future.
You can also see that there are many different areas of London, with some of these areas particularly ripe for a slight fall in prices. There are also other areas that will likely continue to rise in price, which may be linked to further rail developments, improvements in the area or just people looking for greater value for money and this means that London house prices are more fluid than some figures suggest.
Yes, the news that London house prices fell was enough to stop people in their tracks but anyone looking to extrapolate a gloomy or bleak future for the London property market on the back of one month’s figures may find that the situation changes before too long.