London property prices saw unprecedented 0% annual growth in January 2015, according to estate agency chain haart. This is the first time prices in the capital have flat-lined since the financial crash in 2008, although a shortage of housing stock is predicted to spur a spring price hike.
On the other hand, UK-wide property growth continued its upward trajectory, rising 9% annually. Demand still remains high, with 22 buyers chasing each new property for sale in London and 12 buyers chasing each new property for sale across the UK.
“While property prices in London are back to January 2014 levels, this window of affordability will be short-lived as a severe stock shortage spreads pre-election,” Paul Smith, CEO of haart, said. “While December’s Stamp Duty reform has further stoked demand, this has not yet translated into sellers. This means the London market is in stalemate, with plenty of people wanting to buy but a dearth of suitable stock and this will only send prices upward again.”
With London becoming less affordable due to a lack of supply and rocketing prices, haart has reported a boost in the Home Counties market as would-be buyers move away from the capital in search of better deals. These areas, where buyers are likely to get more bang for their buck, have been heating up since the start of the year.
“Homeowners selling in London now and moving further out to cheaper areas will cash in as UK property prices as a whole remain on an upward trajectory,” Paul Smith added. “Borrowers have never had it so good as highly competitive mortgages are in abundance with lenders falling over themselves to gain market share. However, pre-election jitters appear to be spooking the market in spite of the party manifestos containing nothing as yet that will impact housing dramatically.”
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