Property News Concept

After a period of disappointing growth in 2012, the UK economy showed a strong recovery in 2013 and so far 2014 shows no signs of slowing down. The London property market has been performing admirably across all areas. The Office of National Statistics results show that UK house prices increased by 5.5% in December 2013 compared with a year earlier and up from 5.4% in November 2013. In December, prices paid by first-time buyers were 7.4% higher on average than in December 2012. For owner-occupiers (existing owners), prices increased by 4.7% for the same period. This growth in confidence from the public has been helped by more attainable mortgage products and government initiatives such as the Help-to-Buy scheme.

The Help-to-Buy scheme has given first time buyers the opportunity they have been craving. More buyers have been encouraged to enter the market which allows first time sellers and second time to buyers to sell and advance therefore creating a surge of activity in the market. In theory this all sounds well and good but we are hearing a common theme from our clients.

The biggest problem our clients are facing is a shortage of stock. The market not only needs the influx of first time buyers, it also needs first time sellers and second time buyers to sell and progress creating a catalyst in the market. What is happening is that sellers are not selling or at least agreeing in principle to sell their property before they find something suitable making them unappealing buyers. As there continues to be limited stock, prices continue to rise. Price is a reflection of supply and demand. The good news is that our clients have been receiving offers well in excess of the asking price for a considerable amount of time. From personal experience buying in this market, I have missed out on several properties as people are paying crazy money and being bullied by the market. I honestly have been shocked at what people are prepared to pay especially in and around London. Surely this price war cannot keep going. In my opinion, we will have another year of exaggerated prices with the threat of rising interest rates.

With a continual shortage of stock and high property prices our clients have been noticing more discerning property buyers. Clients with branches across prime Central London and neighbouring towns are seeing people who initially had their sights set on prime locations buying in non-prime areas. Our clients are seeing a shift in growth. Non-prime areas are out performing prime central locations as people are seeing more gain and value for their money.

Considering overall debt and the continued need for aggressive growth, last year the economy showed its strongest growth since 2007. As we reach the first quarter of 2014, it looks like another promising year especially for the housing market. London has led the acceleration, with prices in the Capital increasing at more than double the UK average.

We wish all of our clients a prosperous 2014.

Article written by Matt Miel

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