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Current trends in the London property market

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With a well-known national newspaper reporting on possibly the world’s smallest but most expensive house in North London this week – where people visiting the house walk through the front door only to find themselves directly under the bed – one can fairly confidently suggest that the London property market is holding its own. London is still an incredibly desirable location to live.

In fact, everything points to now being a good time to invest as the property market grows and grows, and London is the first to experience a positive uplift. This belief is supported by data from the London Housing Market Report (Source: GLA 2014), which focuses on key trends in London’s housing market and shows an upward trend in many areas including price and lending over the last 12 months.

Small, and pricey

Whether you are international property developers interested in London, a private investor looking to add to your global portfolio or you are buying a home for yourself, the London housing bubble seems yet to burst and buyers continue to look at moving into smaller accommodation for larger price tags. So if you bought low, chances are very likely that, right now, you will definitely sell high.

Good news for developers

This upward trend is absolutely positive news for developers, and the news is backed up by the Office of National Statistics figures, which indicate that property values rose 9.1% in February this year compared to a year ago – the highest annual increase in property values since June 2010. Again, it was in London where prices saw their greatest growth. Property values in London soared by 17.7% in February compared to the same month a year earlier. The Greater London Authority (GLA) Report on 27th August 2014, also confirmed that unemployment is going down, more first time buyers are getting mortgages and there is generally a strong economic growth in London.

More lending breathes new life into marketplace

In addition to property holding its price, first time buyers have also been given a chance to get back on the ladder, which has injected new life into a previously stale marketplace. The amount of new mortgages given to first time buyers in the capital grew to almost 50K in from April 2013 to March 2014, the largest combined annual total in six years (source: GLA Report Aug 14). The amount of lending to owners who have already installed their property has been fairly steady, and we have seen almost 40K new loans in the last 12 months.

London stronger than ever

Putting a smile on existing property investors’ faces, the key house price indices show on-going steady month by month improvement in London house prices. Following results announced by Halifax, in London there was an over 4% increase in the second quarter of 2014. Nationwide announced quarter-on-quarter growth of nearly 11%.

Attractive yield on rented property in London

If you are thinking of investing in a London property, the rental market is also strong. In fact, you can expect a very attractive yield at the moment, with domestic rentals in London up 1.4% from July 2013 to June 2014, following data released by the Office for National Statistic’s index of private rents, against a smaller 0.7% rise across other areas in England.

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4 responses to “Current trends in the London property market”

  1. Interest rates are a key determinant when it comes to momentum in the property market. Mortgage holders have had a pretty easy ride for the last few years in terms of interest rates, after they were slashed to an all-time low post-recession. Despite predictions that the Bank of England base rate will rise in 2015, it is likely that any hikes will be small. This means borrowers will have time to adjust their spending, but it could mean buy-to-let investors fail to carry out regular maintenance on their properties, which may drive down rental costs.
    When it comes to property values in 2015, London may see prices stablise as uncertainty grips the market in the run up to the General Election in May. However, popular areas such as Battersea will continue to experience growth, so it’s all about knowing where to buy and understanding your chosen postcode well.

  2. What a difference six months makes! Reports in March 2015 now suggest London’s property market is cooling. This is probably due to political uncertainty caused by the upcoming general election, and a shortage of supply of good quality property for sale.

  3. Donovan Bell says:

    From what I’ve seen lately house prices seem to be on a continued rise at the moment. Certainly where we are in Peterborough, house prices are rising steadily. I wonder if the lack of properties coming on to the market is a factor?

  4. Reports in London shows over 4.5 million home owners are looking for new homes. Home Exchanging known as “homeswappers” websites can help find new homes. is probably the most leading website for property exchanges.

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