Musings of a London Property Finder
At first glance the latest house price report produced by the Land Registry makes for worrying reading for London investors or those who have just bought a new London home. According to the Land Registry, house prices in London dropped by 1.5% in May whereas those in the South East – the Home Counties to you and me, drifted up by 0.5% on average. These figures are ’seasonally ajusted’, which at this time of year, means the index-gurus adjust the indices down to reflect the fact that this is traditionally one of the busiest times of year in property. So house prices in May in London have probably increased slightly in reality in common with the non-seasonally adjusted figures in other house price indices.
The other point to mention is that house prices outside London fell much more quickly than they did in London. According to the Land Registry, average London house prices are on a par with where they were in July 2006. House prices in other parts of the South East have fallen back to levels last seen in May 2004.
In 2007 and 2008 we predicted that London house prices would return to 2006 prices and stabilise there for several years and it certainly looks like that is what is happening. Expect pricing to bump along for the next few months and cool off in in the Autumn. There has been much debate about what will happen thereafter – some are predicting a 20% bounce in 2010, but we are taking a more pragmatic view.
In our role as Property Finders in London and the South East, our main problem is finding enough quality property to show Clients. The shortage of supply is fueling pricing at the moment as demand is high for good well-priced property. In London, demand is stronger as a good lateral flat or well-located house have excellent prospects for the buy-to-let investor. Even in a downturn, there will still be people with the money to rent in London and with other methods of saving offering little return, there has been a definite shift back to investing in bricks and mortar.
The key point is everything seems to be stabilising, but if you instruct the right London Property Finder, you should be able to get your hands on a bargain, whenever you enter the market.