UK Price Rebound, But Not In London
2 minute read
A growing imbalance between demand and supply has caused property prices across the UK to increase. Left behind once again was London, with its sixth consecutive monthly price decline. 8% more surveyors saw a decrease in houses coming onto the market in February, yet demand has stopped decreasing and has now stabilised. With demand increasingly outstripping supply, RICS members are now forecasting a 2.4% increase in house prices over the next 12-months, which is a significant increase on the 1.8% predicted back in January. Simon Rubinsohn, RICS Chief Economist, said, “It is encouraging that the negative trend in buyer enquiries appears to be dissipating, perhaps in part because of growing confidence that the cost of borrowing will stay lower for longer.”
Why not in London?
Meanwhile, London has bucked this trend with demand for both high-end and low-end houses decreasing. But why is this the case? At the high-end of the market, new rates of stamp duty may be deterring buyers. Buyers will now pay 10% stamp duty on any value between £925,001 and £1.50m, whilst anything in excess of £1.5m will be subject to 12%. At the other end of the spectrum, demand for low-end property has also decreased as tighter lending criteria has made it very hard for first time buyers to get a step on the property ladder in London, where average house prices are in excess of £450,000. However, with news of price changes and also the continued rise of high LTV mortgages, it seems likely that London will once again become a popular location for first time buyers.