Are House Prices Falling in London?
So far in 2024, London’s housing market has been going through a bit of a rough patch, in line with what we’re seeing across the UK. Last month property prices across the UK fell 1% from the previous month according to the data on the Halifax Price Index but are still up 0.3% on the year. Depending on where you live, and where your property is in the city you might be noticing these changes more in some areas than others.
This might make you feel a bit uneasy, especially if you need to sell your house fast and are considering when the best time to put your property on the market is. It is a bit of a challenging time and the mood is mixed, what with question marks over the timing of rate cuts and the possibility of a new Prime Minister later adding to the uncertainty.
Whether you are a homeowner wondering if now is a good time to sell your house? Or a landlord about to sell a buy-to-let, whilst there is some negative housing market sentiment out there, there are still buyers; Although the average time to find a buyer is currently a huge 71 days, the longest since 2019.
If you need to sell your flat fast, a cash house buying company will make you a no-obligation free cash offer within minutes and can guarantee you the sale of your property as quickly as you need.
Overview of London’s housing market
A good way to find out what is going on in the property market is to look at the Halifax house price index that’s released every month. It tells you that over the last 2 years UK property hasn’t really changed that much and that London continues to have the highest average house price in the UK at £539,917.
Last month some homeowners made the decision to hold off from putting their homes on the market, and buyers held off from putting up offers, as they were hoping the chancellor was going to provide them with some incentives or tax breaks in the Spring Budget. As he didn’t, many sellers have re-listed their properties, but there has been a bit of a pause in interest from some buyers due to the lack of supportive housing market measures.
What with rental costs rising at record rates, and more workers having to return to the office we think it looks unlikely that prices will fall much further. But you need to price your property realistically because buyer demand remains sensitive to pricing.
What has happened to property prices in my London borough?
The decrease in property prices isn’t the same across London; some boroughs have been experiencing bigger declines than others. Statistics are required to pinpoint the exact boroughs facing the highest drops, and general trends suggest that areas with previously inflated prices are seeing more significant adjustments.
The trends suggest that while London’s market is recovering, the recovery is uneven, with significant differences across the boroughs. There are many factors contributing to these variations including local economic conditions, the return of international buyers, especially in prime areas, and perhaps differing levels of supply and demand affecting local markets.
The borough with the largest yearly negative change in pricing is Camden, however, according to the latest data, last month saw a rebound in prices, so maybe things are looking up. The other boroughs that have seen the greatest fall in asking prices are Barking and Dagenham, Redbridge and Merton. When you look at Merton though you can see last month experienced the greatest positive change of all the boroughs with a rise of 4.9%. This kind of price action is indicative of a market that is bottoming and is in line with our earlier overview of the London housing market.
Source: Rightmove Internal Data March 2024 London Borough Data
On the flip side, asking prices have risen most in Hammersmith and Fulham, and Richmond upon Thames, both seeing a yearly positive change of 5.6%. On balance the boroughs that have seen the most positive yearly changes are now looking like they are are plateauing, which makes sense with the housing market levelling out.
What is driving London property prices?
Several factors have been contributing to house prices falling in London:
Economic uncertainty: The country as a whole is still worrying about the rise in the cost-of-living, energy bills, inflation and price rises. All of which has weighed on investor confidence. When investor confidence is low it makes buyers less likely to show asking offers for properties they are interested in purchasing.
Whilst we have these ongoing economic fluctuations and uncertainties, it is difficult to imagine property prices rising too much. But on the positive side, annual energy bills are set to fall in April and inflation is also slowing, so the economic outlook is improving.
Mortgage rate changes: Those on variable rate mortgages have experienced a significant rise in their repayments. For first time buyers, and current homeowners looking to re-mortgage, affordability is a big issue, and whilst mortgage rates are beginning to fall, they remain relatively high. This is making it harder to get approval from a lender and actually be able to buy a property.
Demand and supply: The number of buyers registering with estate agents has decreased, but the number of new properties on the market is increasing, meaning the market is moving more slowly. It is taking longer to find a buyer and sellers are therefore deciding to reduce their asking prices to attract a buyer.
Government policy: Stamp duty land tax surcharge for overseas buyers made property less attractive for foreign investors, which in turn reduced the volume of foreigners buying houses in London. The increases in stamp duty for high-value properties, the surcharge on stamp duty for second homes, and the change in tax relief on buy-to-let have all continued to have a cooling effect on the property market.
Going forward, taxes and incentives from a new incoming government could have a significant impact on the housing market, so watch out for any changes.
What do the experts predict for house prices in 2024?
- Rightmove forecast a drop of 1%
- Zoopla forecast a drop of 2% this year.
- Halifax predicts prices will fall by between 2% and 4%.
- Nationwide anticipates house prices will see a low single digit decline or remain unchanged.
Forecasting the future of the housing market is difficult, but taking everything into account, it seems that while we might not see big drops in house prices, a few challenges are still on the horizon. Economic uncertainty and higher borrowing costs might make it harder for some people to afford homes. This doesn’t mean prices will move significantly, but rather, the market might stabilise, which could be a good thing for both buyers and sellers. If you are thinking of moving home, the market may not be booming, but it could offer some steady opportunities as things start to level out.
Who will buy my London home?
Are you looking to sell a London property and haven’t had any luck with a traditional estate agent? Are you getting viewings but no offers? Have you had to reduce your asking price and you still are not getting any offers? Are you starting to think you are selling an unsellable house? If you have answered yes to any of these questions then do not worry help is at hand.
Gaffsy provides a quick no-obligation free cash offer for your London property, covering all legal fees and providing a guaranteed sale without the need for traditional estate agents.In fact, we buy any home! We promise a chain-free, hassle-free process and as we are genuine cash buyers we can complete sales rapidly, typically within days.
Contact Gaffsy today to find out how you can secure a speedy and stress-free sale of your London home.
