House prices in London slowed almost to a halt last month, could this be the latest sign that the once red-hot market is rapidly cooling?
City Quays has seen from official Land registry data shows that the average price of a home in London went up just 0.1 per cent, or £536, in June to £437,608 this is after surging 10 per cent since the beginning of this year.
This combination of new harsher mortgage rules, fears of a looming interest rate hike and the strength of sterling have all added to what looks like the end London’s property ‘season of excess’ and has brought the once rampant sellers market to a standstill.
Peter To at City Quays says that with the hectic start to 2014 creating this season os excess, the pace of the housing market boom in London has slowed this quarter due to the market needing to stabilise and hopeful returning to more normal standard trading.
Developers in London are helping to create more choice in the market and sellers are able to find their next onward purchase and consider trading up. These calmer conditions in the market are meaning that buyers view purchasing London prime property as less of a daunting process than has been the case recently or in the past.
Annual property price inflation in some outer boroughs has slipped into single figures with just 8 per cent recorded in Hounslow and 8.3 per cent in Redbridge. The biggest rise was in Waltham Forest where prices have soared 28.1 per cent in a year.
We can see from the land registry figures, this is regarded as the “gold standard” for house price measurements in the UK, that for the first time have shown signs that the market has reached a plateau.
Its figures tend to lag several months behind less reliable but more immediate anecdotal evidence in the market because they are based on completion prices lodged with the registry, which is solid evidence of the real state of the housing market.
Prices are still 16.4 per cent higher than they were a year ago, but the annual rate of increase is starting to subside from the 20 per cent levels seen only a few months ago.
Peter To at City Quays thinks that monthly growth of 0.1 per cent is not exactly a slump but the heat does appear to have gone out of the property market.
With the mortgage market review, rate rises to come and wage growth still proving insignificant there is every reason to expect that this more conservative growth to carry on in the months ahead.
He also says ‘London buyers in particular have reached a point where enough is enough. This season of excess could not have lasted forever.’