If you want to find out what’s happening in the London property market and the latest update then you’ve come to the right place.
Hi everyone, I’m Ugo Arinzeh with Onyx property consultants powered by Keller Williams. I’m a London-based property agent and I help my clients buy, sell, rent, or manage property throughout London. One of the biggest questions we always continue to get is how is Brexit impacting the London property market? One of the answers is it’s actually not been so great over the last 12 months. Through May we’ve seen a 2.5% overall decline in the London property prices to an average asking price of £621,000.
In the hardest hit areas, which is prime central London, we’ve seen Westminster have the largest decline of 6.3% with an average asking price of £1.4million.
Kensington and Chelsea which has the highest property values in all of the UK has seen a price average price declines of 3.9% to an average asking price of £1.6M.
Outer London which has continues to benefit from large swathes of land where you can redevelop and regenerate and create whole new housing developments has actually seen 0.9% average increase to an average asking price of £521,000.
There really are only two areas that haven’t seen price reductions and those are in Bexley and in Barking and Dagenham on the outer skirts of London and that’s really not surprising considering that they are some of London’s cheapest boroughs. Average asking prices there are £406,000 and £316,000, respectively.
I’m going to include a link in the video below so make sure you check it out which shows a breakdown of the boroughs and the average changes in housing prices over the last twelve months so you can kind of see where you live and how that compares. London property price declines is actually particularly stark as it compares to other parts of the UK, such as Wales and the Midlands which are actually seeing average price increases.
Everybody focuses a lot on Brexit but one of the other critical factors that has impacted the London property market have been the stamp duty changes that started back in December 2014, with additional increases in April of 2016 and then also interest expense reductions that have really impacted buy to let mortgages, so it’s been a series of government induced things that have impacted the market and made the transaction volumes decline over the last 12 to 36 months. As far as transaction volume through April we had 85,000+ transactions in London which is a 26% decline in average transactions compared to before the EU referendum in June of 2016 and a 4.6% decline annually.
In Prime central London we’ve seen a decline of 16% this is to 3,295 transactions.
What does that mean for the average buyer or seller? It definitely means that at the end of the day people still need to buy and sell their homes for whatever reasons, it might not be a great time to sell just for the whim of it or to get top dollar but if you need to sell for personal reasons, I’m actually working with first-time buyers who are looking in Bexley, we’ve actually found them a great first family home that’s being sold by a couple that’s divorcing, so in that situation they have to sell and really don’t have a choice.
In another situation, I have sellers who are selling because they’re looking to up-size and in that situation, while they might not get their original asking price for their current family home it does mean that when they do sell they’re going to be in a great position as a buyer to buy that next family home, so we want to make sure we look at that entire picture. So investors, you have to look at the whole picture so while it might be less profitable when you have the benefit of the interest expense deduction that we used to have, we are able to take advantage of reduced property prices and make sure that those numbers stack up, it continues to be a low interest rate environment so when you factor those things in and the cost of purchasing the property and given where rental rates are, you need to make sure that you’re still getting a decent enough yield and then hopefully when the market corrects and improves you’ll be taking advantage of long-term appreciation as well. For those buyers who are looking to buy a family home or a place to live this is absolutely the best time.
We’ve had a lot of buyers looking at property, sitting on the fence, not sure to pull the trigger and you’re going to miss that opportunity that you might end up regretting because you don’t want to buy on something that might decline but if you’re going to hold it for a long-term strategy what does it matter if it declines over the next few months to another 12 to 18 months?
So hopefully we’ll pick up again in the next few years, I’ve actually recently sold a property in Waterloo and our sellers there are cashing out to take their money out of the UK and buy a family home or secondary home out in France and in that situation even though it was a buyers’ market we were able to sell them for a great deal given how long that they’d owned property and they were able to take advantage and just really move on with their lives.
So, if you’ve got any questions about thinking about buying or selling do get in touch you can reach out and ask your questions on this video also check out the links on some helpful videos on what’s happening in London property and the average property prices and as always if you want to see more of my videos make sure to subscribe because I will be posting weekly videos that talk about London property market great areas to live and work what makes this place so fantastic, so look forward to seeing you again that’s Ugo Arinzeh with Onyx Property Consultants, bye for now.
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