London prices flat line for first time since crash

London’s property prices show an unprecedented 0% annual growth in January 2015, which is a reflection of the current lack of affordable homes in London according to estate agents Haart.

Related topics:  Finance News
Rozi Jones
16th February 2015
london map pin uk

Despite this, some post-code areas saw strong monthly growth – the North rose by 21.2% annually while the South East rose 9.9%. Additionally the commutable Home Counties are benefiting from those buyers now moving away from London in search of affordability.

The West post-code saw the greatest annual house price dip, with property prices down 13.3% to £545,703.

National property prices have remained broadly flat since October 2014. This January prices dipped 0.2% on the month but showed strong annual growth, up 8.8% annually. Demand remains strong across the UK with 12 new buyers chasing each property for sale.

The average first-time buyer property price dipped by 2.1% in January compared to December, making conditions slightly more favourable for those seeking to take the first step onto the property ladder. Since August 2014 first-time buyer property prices have been on a strong upward trajectory, so the fall this month in prices will be welcome news.

Currently 12 buyers are chasing each new property instruction in January 2015, compared with December 2014 when this stood at 11. While the number of new buyer registrations is up in January, by 4.7%, the supply of homes has not grown at a corresponding rate with new properties for sale down -2.9% on the month.

On an annual basis the number of new buyers is down 27.2% whereas the number of new properties for sale is down 13% only. If the fall in buyer registrations continues at a greater rate than new property instructions we will see UK house prices become more subdued.

The number of new first-time buyers jumped 7.8% in January as people seeking a fresh start in the UK take advantage of continued low interest rates and the ongoing mortgage provider battle.

Paul Smith, CEO of Haart, comments:

“While property prices in London are back to January 2014 levels, this window of affordability will be short-lived as a severe stock shortage spreads pre-election. While December’s Stamp Duty reform has further stoked demand, this has not yet translated into sellers. This means the London market is in stalemate, with plenty of people wanting to buy but a dearth of suitable stock and this will only send prices upward again.

“Homeowners selling in London now and moving further out to cheaper areas will cash in as UK property prices as a whole remain on an upward trajectory – up 9% annually. Borrowers have never had it so good as highly competitive mortgages are in abundance with lenders falling over themselves to gain market share. However, pre-election jitters appear to be spooking the market in spite of the party manifestos containing nothing as yet that will impact housing dramatically.”

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