London property bubble about to burst
London property bubble ‘about to burst ‘ .
The London property bubble could be about to burst, with the quantity of “distressed” sellers in the capital rising for the 1st time, according to one property company.
Prime London costs, as in Belgravia, limited supply and cash-rich world buyers masked the genuine state of the home market, PPR Estates said
PPR Estates stated that it had seen increasing quantity of queries from property owners in London looking for a fast sale below the prevailing market price. It said rising unemployment, a rise in the quantity of company liquidations and a collapse in buyer interest especially in areas hit by the current riots were the culprit.
Nick Hopkinson, the director of PPR Estates, said that during the last one or two years there had been an increasing quantity of “distressed” sellers in other bits of the country, but London had seemed to be immune as prices continued to rise.
This has changed though within the past two months, with the company now reporting a jump in the number of questions from both home and commercial property owners in the capital who have to access the equity in their home swiftly.
“Two totally different property markets have emerged in London and across the rest of the United Kingdom in the last year,” Mr Hopkinson related. “London has been the single area of the UK to buck the downward house price trend. Prime London costs, limited supply and cash-rich international customers have masked the genuine state of the housing market by propping up the national stats.
“And our company has had comparatively few distressed inquiries from London sellers as a result of the unique dynamics in the capital.”
But he announced this sentiment had changed over the past few months, a trend particularly noticeable in areas hit by the present riots like Lewisham, Croydon, Walthamstow and Tottenham.
“In the areas we have seen consumers withdrawing. As we move into autumn I fear this might end up being the catalyst that bursts the unsustainable property bubble that built up during the last few years.”
According to the latest information from the Land Registry, in July house prices in London showed increased by 1.3pc over the year. We are also aware of global consumers pulling back from investment purchases as a result of a reduction in confidence in the ’safe sanctuary ‘ investing benefits of London. In each other region in Britain and Wales home prices slid. The biggest falls were in the North East, where prices fell by 8.8pc ; in Yorkshire and Humber they declined by 4.5pc while in Wales they slid by 3.4pc.
In the South East and South West price falls were not as dramatic, but property prices fell by 1.1pc and 1.9pc respectively over this period.
PPR Estates announced that in the regions negative equity was an increasing issue for many home owners. A year ago it was able to help more than 15pc of the “distressed” sellers outside London who made contact with the company. Now it was in a position to help less than 10pc because the market price of their property was less than the value of their mortgage.
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Seven Ealing homes sold for over one million during April
Seven Ealing homes sold for over one million in the month.
The most recent figures from the Land Registry point to further rises in local property costs.
During April the average exchange price in the W5 area has been £632,131. This is the highest monthly average on record and was turbo-charged by the sale of seven homes which went for at least £1 million. A reasonably healthy 41 properties were sold during the month.
In West Ealing things are a bit quieter with only Seventeen properties selling at an average of £349,853.
The April info from Land Registry’s flagship House Price Index shows a once a year price decrease of 1.3 % which takes the average property value in England and Wales to £163,083. The monthly change from March to April is an increase of 0.8 percent. The area with the highest annual price change was London with an increase of 5 %. London also experienced the greatest monthly rise with a movement of Three per cent.
The most up-to-date figures available show that during February 2011, the quantity of completed house sales in England and Wales decreased by 10 per cent to 38,336 from 42,515 in February 2010. The quantity of properties sold in Britain and Wales for over £1 million increased by Fourteen per cent between February 2010 and Feb 2011, from 399 to 454.
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Growth in prime Central London property market expected to continue
Strong expansion in prime London property market predicted to resume .
Despite new records being set across London’s most exclusive neighbourhoods, the market should make preparations for further gains over the remainder of 2011, according to the firms Liam Bailey, head of home research.
Central London prime property costs have gone up by 36% in two years, with more to come, according to the most recent sector index from Knight Frank.
Price expansion in the prime central London market continued thru August with another 0.9% rise. Prices have been going up strongly since April 2009, and are now nearly 4% higher than their previous top in March 2008.
An analysis of market activity during August, compared with the same month in 2010, confirms a sector in rude health in spite of the impact of up to date finance market chaos.
On the demand side, new customer volumes are up by 11% over this period, viewings are up by 23% and the number of offers being made on properties is higher by 13%.
‘Prices are higher, as is demand, and supply increases are being absorbed by the market with a sharp rise in year by year sales volumes,’ claimed Bailey.
Stock volumes have risen by 13%, but the rate of sales is keeping up with this increase, with the amount of exchanges rising by 15% year-on-year and the amount of properties going under offer rising by 67% over the same period.
‘In trying to give an explanation for the strength of the current recovery we should note that while clients
purchasing with sterling are now paying prices north of 2008 top prices, eurozone buyers are still in a position to achieve a 10% discount on 2008 prices and US buck purchasers an 18% discount,’ he said.
Bailey also indicated that London’s much touted ’safe haven’ standing took more than a tiny bruising in Aug, with photos of pillaging, gas bombs and demonstrators replacing William and Kate’s wedding as the stock picture of London in the world consciousness. ‘It is too early to see any firm proof, but the riots appear unlikely to dent most world buyers’ want for property in the city,’ he claimed.
The prospects for the prime London market is for price expansion to run a bit farther this year.
‘Barring any reversal, with an uplift of virtually 11% since the beginning of the year, there’s a
Potential for a significant double digit growth rate by the year end,’ added Bailey.
If you have a prime Central London property to sell, but still want to take advantages off strong growth in the property market, contact London’s leading Home buyers.
Will the Tottenham Riots affect Tottenham house prices
Will the Tottenham Riots affect Tottenham house prices?
By now most of you will be aware of the Tottenham Riots that took place on Saturday night (06/08/11). With all the major news channel, newspapers and social media sites, showing images of rioting and looting within the Tottenham and Wood Green areas.
What started as a peaceful demonstration following the shooting dead of 29 year old local resident Mark Duggan on Thursday by police. The demonstration soon escalated into the worse riots London has seen since the Broadwater Farm riots of 1985. A night of violence that saw over 20 police officers injured, 42 arrests and a wave of looting, burning and damage to many shops and homes within the Tottenham area.
It’s too soon to say how house prices will be affected after the Tottenham riots, but in the short term these riots will certainly have a negative impact on Tottenham property prices. After the Broadwater Water Farm riots of 1985, Tottenham had £m’s invested into the area, some of which has now gone up in flames. In an already volatile property market, Tottenham house prices will certainly suffer in the short term and the area could lack further investment for many years to come. With many people trying to sell their Tottenham homes after these riots and a major shortage of home buyers willing to live in the Tottenham area, house prices could go into a steep decline.
London Property hotspots
London Property hotspots
The latest advancements in facilities in some towns are helping the towns to overcome the slump that was caused by the recession. Here is an analysis of certain areas around London where a lot infrastructure development has lead to better amenities and facilities:
East London
- The 2012 Olympic is to be turned into a big housing scheme. The 2012 London Olympics will benefit about 11000 home owners.
- The government has made investments in the scheme and the future is definitely looking bright.
- The whole area is being developed around the Olympic village and the park. Thus it is the best time to snap up an investment in the area.
Kentish town
The St Pancras Eurostar terminal is definitely a boon for the people in Kentish town as it is definitely going to fasten the developments. The New French School would definitely attract a lot of French population in the town. The home owners in the Kentish town can be at six minutes at the terminal which connects to Paris in about 2 hours and 45 minutes. The prices are on a rise as the Kentish town is one of the hubs of culture and music and is amazing to live in. Contact Kentish Town Home Buyers if you want to sell your home for a profit, with no delays or estate agent fee’s.
Hindhead Head Tunnel, surrey
The 371 million pound hindhead tunnel is to open up in July. It will definitely decrease a lot of pressure of traffic from the A3. The tunnel would be a boon to the towns of the south as it would definitely increase the desirability of the place. Once the tunnel opens we will see a wave of people moving down south to buy their houses.