House prices in London have grown substantially throughout the recession and continue to do so.  This has led to a level of unaffordability that while has shut out many hopeful property buyers, it helped to keep the average UK house price looking much better overall than was truly  showing in other regions.  A new report by Hamptons International revealed that with the combined factors of the cost of living as well as increasing house prices, London offers less affordability than what was seen during the house pricing peak of 2007.

The low interest rate mortgages being offered by lenders, some of which were only recently lowered to even more affordable levels, have helped many attain their dreams of property ownership.  No doubt the government’s Help to Buy program assisted many buyers as well.  This is despite the fact that many households are still finding their household budgets to be rather tight.

The recent turn of events could offer some relief for home buyers, even in the London area, but “with the good comes warnings of bad”.  House prices are cooling off and that will make sellers more competitive and buyers will have an advantage.  As mentioned, lenders have been lowering their interest rates on mortgage and remortgage deals, making the potential for a good deal very likely, even in the capital city.  Yet, there are warnings that the cost of borrowing will soon be more expensive.  Months are ticking by on the calendar as the Bank of England draws nearer to moving the standard base interest rate upward. 

While mortgage deals are cheap and property prices are cooling, home buyers may find the best deals in comparison as to months ahead when borrowing will cost more.  Even homeowners should take notice as their equity growth will be cooling off along with house prices and low interest remortgage deals are also easily found on the market today.  Experts warn that early 2015 will likely be when the historical low interest rates will begin to disappear.