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House Prices in London to Rise to 9 Per Cent for the Year

House Prices in London to Rise to 9 Per Cent for the Year

House prices are falling across the UK except for the area in and around London.  Not only is it growing, but a recent research study has led to a forecast that the house prices will rise 9 per cent for the year in that area.  The rising prices in the London area when averaged in with the declining prices outside of London help to paint a more optimistic picture of the housing market and declining house prices on the whole.  However, even in London the supply of homes going up for sale are starting to outpace the number of buyers according to data from Knight Frank Residential Research.

Liam Bailey, head of Knight Frank Residential Research, said: "Price growth in the prime central London market continued through June with a further 0.9% rise in prices. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009, and prices are now 2% higher than their previous peak in March 2008.

 "Looking behind the headline numbers for price growth, activity measures are pointing to continued strong conditions in the central London market over the next few months.

"While the number of exchanges fell year-on-year in June by 9%, this was not unexpected, bearing in mind the surge of sales prior to 6 April as buyers tried to complete their sale under the old 4% £1million plus stamp duty rate rather than the new 5% rate.

"More tellingly there appears to be a new wave of sales coming through, with the volume of properties going under-offer (sold subject to contract) rising by 52% year on year in June.

 "On the demand side the number of new buyer registrations has held steady (up slightly by 0.4% this June compared to June 2010), although viewings volumes were up 8% over the same period.

"If demand has risen marginally, supply has risen more rapidly – much to the relief of buyers who have faced thin choice in the market for the last 18 months. Stock volumes have risen 12% in the year to June, but there is more in the pipeline – with the numbers of new instructions rising 55% in June compared to last June.

 "In the light of ongoing strong conditions in the market, we have revised our 2011 forecast for prime central London prices upwards from 3% growth to 9% over the year – this forecast assumes a slowing in price growth in the second half of the year, driven in part by rising supply and a more competitive environment for vendors."

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