Good news for London property |
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| Economy | |
| Written by Paul Williams | |
| Wednesday, 05 November 2008 | |
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Haart have this morning revealed their latest analysis of the London housing market, offering a glimmer of hope. The latest data reveals that house prices have decreased by 0.9% in Ocober.It was however noted that a positive trend was emerging - the trend is a simple one - houses that are priced sensibly are selling. Thus suggesting that the bubble burst has left the market on what would appear to be a solid platform. In their analysis of the results Haart noted that the positive effects of the Government’s bank bail out plan and the base rate cut, set to improve consumer confidence as well as economic stability, have been lessened by talk of an official recession and continued restrictions on mortgage lending. However, the lower end of the market has felt less of the impacts of the more recent financial volatility and sensibly priced properties are selling. Mid and lower end properties steadying House prices in the capital have now fallen by over 15%, with the latest decline of 0.9% taking the average price to £245,036. Prices are unlikely to drop more than 2% further before the end of the year. Vendors have become increasingly realistic with the pricing of their properties and mid range and lower end homes are selling as a result, with vendors continuing to achieve 95.5% of their asking price, up from 94.5% four months ago. Russell Jervis, Managing Director of haart, comments: “Despite the threat of a recession knocking consumer confidence, vendors who are prepared to accept estate agents’ advice and adjust their price expectations in line with the market are having success in agreeing a sale. This is particularly true as buyers are beginning to take the opportunity to move up the ladder while prices are low, which is something that many were struggling to do in 2007. “While there is still activity in the market, the bank bail out plan coupled with the reduction of the base rate to 4.5% has not yet had the positive impact that we would have hoped. However, the foundations have now been laid for improving liquidity and we are seeing interbank lending begin to thaw as the LIBOR continues to fall. These are promising signs that competition is returning to the market and more mortgages will be made available.” First time are interested Levels of first time buyer enquiries increased for the sixth consecutive month to 22% in October as prices in the more affordable areas fall back into reach. Russell Jervis continues: “Still aspiring to own a property, first time buyers are watching the market and are ready to take advantage of the realistic and more affordable prices. However, although deposits are coming down, finance is still not readily available to this group.”
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