London house prices continue to fall for the sixth month running in February
- Credit: PA Wire/Press Association Images
House prices in London declined for the sixth consecutive month in February, as the capital was the only place in the UK where more decreases than increases were reported in February.
However, according to the latest RICS residential market survey, prices fell at a slower rate in February than in previous months and there are signs that the trend is starting to turn around.
An overall balance of 28percent of surveyors in London reported prices decreasing rather than increasing, which is down from 46percent when the same question was asked in January.
Simon Rubinsohn, chief economist at RICS, said it is “worrying” to see the fall in new properties coming on to the market and even in London, where prices continue to fall, there is a strong view that the price of property will become even more unaffordable over the medium term.
Chris Antoniou, sales negotiator at JTM Homes, said that the big difference compared to the same period last year was that asking prices in Kentish Town, Tufnell Park and Archway have stabilised thanks to a shift in the balance of supply and demand.
He said: “People are wanting to sell properties, the difference is there’s a lot more properties on the market at the moment.
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“Demand is down slightly because there’s a lot more on the market than there was last year so people have a lot more time to get what they want as opposed to panic buying. Prices have stabilised completely compared to this time last year.
“The market’s all about pricing correctly now. If you do that, your property will definitely sell.”
RICS said anecdotal evidence suggests that political uncertainty may be adding to the supply constraints by causing some sellers to hold off putting their properties on the market.
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However, Mr Antoniou said that many of JTM’s new instructions are at the lower end of the market, suggesting that the forthcoming election is less of a concern for lower value properties.
He said: “The majority of our buyers at the moment are first time buyers because most of properties that we are taking on at the moment are smaller one bedroom, maybe ex-council flats.
“A lot of vendors are looking to take the next step now. I’ve done quite a few valuations this year for people who bought from us three or four years ago and have made a lot of money on their property looking to buy in the same area but moving to bigger properties.”
New potential buyers are also being attracted by the historically low mortgage rates on offer and RICS reported signs of a more upbeat trend in inquiries from new potential buyers, which it said could be partly down to growing confidence that the cost of borrowing will stay lower for longer.