China’s chaos contrasts with solidity in the north London property market
- Credit: PA Wire/PA Images
The after effects of Black Monday haven’t spelt disaster for the mortgage lending market in London
As China’s economy struggles on with yo-yoing share prices, the latest Council of Mortgage Lenders statistics for London in the second quarter have revealed that the city can still be seen as a safe haven for investors, despite there being some evidence of levels falling compared to the same quarter last year.
“There is a pervasive sense of optimism in the capital, and it wouldn’t be a surprise if mortgage lending, transactions and prices were all even sunnier in Q3 than in these latest official figures for the previous three months,” said Andrew Bridges, managing director of London estate agents Stirling Ackroyd, which has an office on Finchley Road.
“Even the latest chaos in China and global financial markets doesn’t spell disaster for the London property market, which is seen as a comparative haven for international investors.”
Remortgage lending had both quarter-on-quarter and year-on-year growth in volume and value and Peter Rollings, CEO of Marsh & Parsons, said that remortgaging activity in particular is enjoying “a moment of glory”.
The number of remortgage loans was up over seven per cent on the first quarter of 2015, and over six per cent on the second quarter of 2014.
“This atmosphere might well continue for the remainder of this year now Black Monday has made an interest rate rise unlikely before 2016,” said Rollings.
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However, while home-owner house purchase activity in London came out of a traditional seasonal dip and began to grow in both volume and value, levels were still down compared to the same quarter last year, with first-time buyer activity and home movers seeing similar trends.
Bridges added that the statistics also pointed towards the need for the development of an affordable housing market in London, concluding that more homes need to be built to keep up with demand.
North London has a particular problem with affordable housing, with the average price of a two-bedroom flat in Hampstead a whopping £1,030,493.
“Our own research shows a 73% quarterly acceleration in homes given planning permission in the capital – but today’s it is clear there is much further to go. Londoners are already stretching their income much further than other Britons to get a foot in the door of their own home. Building more homes simply can’t slip off the agenda,” he said.