“Cheaper” London property in 2017, experts predict

Property in the capital is going to become slightly more affordable in 2017, at least according to some industry experts.

Research by Rightmove found that asking prices in London for top-end properties fell by 8.7 per cent in the past year, while Zoopla revealed that house prices grew much faster in east England and the West Midlands when compared to the city.

London’s annual house price growth for 2016 peaked at 3.7 per cent, chasing the national average of 4.5 per cent.

It was the runner-up for the first time since 2008, said Nationwide Building Society.

Despite this, the average house price in London is still towering the UK average – £474,000 compared to £217,000 across the rest of Britain.

Experts predict the slowdown in central London is the result of significant changes in the housing market. Last year saw the introduction of a bumper Stamp Duty Land Tax (SDLT) surcharge on buy-to-let and second homes, adding an additional three per cent tax per transaction.

Ray Boulger, of John Charcol mortgage brokers, says it led to an increasing trend at the more expensive end of the market to extend rather than move, thus impacting the ability of chains to form lower down the market as well as reducing the number of high level transactions.

However, some experts are looking to new buyers to keep the market afloat.

“First-time buyers still underpin the wider market. So long as the government continues to support them either directly via Help to Buy or by further tax changes then the market should not plunge,” says property buying agent Henry Pryor.

Mr Boulger added: “With more talk around the lack of homes being built, Brexit fears or the government increasingly grabbing the buy to let market by the horns, one thing that you can always expect is the housing market’s ability to throw up surprises and show resilience in ways you’d never expect.”

Rufus Ballaster of Carter Lemon Camerons’ experience recently underlines this view of surprise outcomes from events. The Referendum outcome has increased uncertainty for the UK economy but the currency drop since that result was announced makes UK property far more affordable as an asset class for non-UK based investors and the property team at Carter Lemon Camerons has handled and increase in purchase and refinance instructions in the latter part of 2016 as a direct result. “The ‘law of unintended consequences’ is hard at work,” said Rufus.

Carter Lemon Camerons has in-depth knowledge of property law.  Whatever the size of the deal we advise on every stage of your transaction to meet your goals. For more information, please contact Rufus Ballaster.