Given the recent political changes and major adjustment to interest rates and stamp duty, the sales market has had a lot of coverage. Many of the large nationwide agencies have adjusted their forecasts to more negative growth than first predicted. However, experience tells me that these forecasts are often overly gloomy and in particular for the London market.
The London market differs from most of the rest of the UK on a number of factors, one of the most important, is that in my experience, it has very few forced sellers even at the worst of times. This means that most people who can’t achieve a price they either want or are happy to accept, simply keep the property and either rent it out or continue to live there. The London market also hasn’t experienced the double digit increases that some other areas have had over the last few years, so in reality, it shouldn’t have as far to fall. Our lead numbers have been very consistent despite the increase in mortgage rates and interestingly, we are having a lot of investors showing interest that haven’t been the market in recent years. Perhaps the exceptional demand on the letting front coupled with a real difficulty in getting a return on investment elsewhere is driving this. We do expect the interest rate increases and the knock on rise in mortgage rates to affect affordability but we also don’t expect stock levels to increase significantly and as such we expect prices to fair well in the medium to long term, with those who need to sell, as always having to be more realistic in the short term.
Jaimie Beers – Managing Director