Cause and Effect: Current Overview of London's property pricing
16 Jul 2021
If you’re thinking of buying a property in London, with price growth well behind the national average, do you see that as an opportunity or a threat? Read on and be in the know about London property prices.
By March 2021, the London property market had earned the dubious distinction of being the worst performing region in the UK for house price growth – for the fourth consecutive month. Growth lags well behind the ‘powerhouse north’ of England and the UK benchmark.
The contributory factors include:
- Prime Central London sales have been hammered by the absence of international investors due to pandemic related travel restrictions;
- Life in lockdown accelerated the trend for homebuyers to pursue:
- Size. Working from home, converting the dining table to a classroom and the bedroom to a home gym prompted homebuyers to look for larger accommodation.
- Space. With social distancing requirements and lifestyle goals taking precedent, a garden or outdoor space became a priority.
- Mobility. Freed of the daily commute, homebuyers have the luxury of choosing a location to live based upon lifestyle factors – not proximity to the office.
- London’s shrinking population. The arrival of the pandemic coincided with the UK leaving the European Union and a mass migration home of European workers in hospitality, retail and construction.
Of course, look beyond the headlines and a more complex picture emerges. Essentially, the London property market has two speeds:
- Inner London boroughs with a high proportion of flats are flatlining, whilst;
- Outer London boroughs whose streets are adorned with terraced and detached properties are prospering.
Where do London property prices go from here? Much depends upon the impact of three key macro trends:
- The ending of the stamp duty holiday on 30 September. Will demand dry up and prices stagnate?
- The macroeconomic environment. Will the economy mount a strong recovery and support employment growth?
- Consumer sentiment. As lockdown ends and employees return to the office, at least part-time, will homebuyers return to central London?
Thinking of buying London property? Be in the know, download the UK Holmes London Property Market Review now to make a smart investment.