London property market cooling as 2015 Hampstead price freeze predicted
- Credit: PA Wire/Press Association Images
Signs that the property market is losing the momentum seen in recent months have led many to question whether the London house price bubble has finally burst.
The Royal Institute of Chartered Surveyors latest Residential Market Survey, which polls property professionals each month, said that demand in London slipped in September for the fifth month running.
Nationally, price growth is expected to rise over the next three months.
Surveyors in London, however, expect to see prices fall over the same period, for the first time in four years.
Prices are expected to rise only gradually over the next twelve months at a rate of one per cent in London.
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The cooling has been particularly pronounced in prime London, where Savills offices in both Hampstead and St John’s Wood predict property prices in those areas to remain stagnant in 2015.
Asking prices in these areas have risen so dramatically in recent months however, that local agents remain confident, despite a certain drop in demand.
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Frank Townsend, director of Savills Hampstead office said: “All markets wax and wane and a marking time position is actually fine.
“The market’s not going up any more but it’s still strong.
“Anecdotally, what we’re seeing is that sellers who decide to price their property on a futures basis, above the market, aren’t getting those prices now, so that they may eventually end up selling for less than they would have got if they’d asked for the right price in the first place.”
The Council for Mortgage Lenders also reported the first monthly decline in lending to first time buyers since January this year.
First-time buyer loans fell by four pc between July and August, while the typical loan size also fell slightly.
Several factors have combined to contribute to the cooler property climate including over-inflated prices forcing people to buy in less central areas of London or remain renting; the uncertainty caused by the forthcoming general election; the prospect of inflation rate rises; and the strength of the pound making property more expensive for international buyers.