In the majority of London, the prices of houses have been falling for a while now. London’s overpriced market is going through some necessary, long-awaited changes. The prices have been rising in the past and for that reason, the demand decreased. Also, Brexit has affected greatly London’s property market, which is now working on repairing itself. Some estimations are that in the years to come, costs will drop enough for someone with an average salary to be able to invest in a new property and so the demand will rise again.
In February this year, the average house price in London was around 462,000 pounds, which is 3.8 percent less than the average price of houses from just a year ago. This is something the Londoners have been eagerly waiting for.
The rate at which the house prices are growing is the lowest it had been since ten years ago in 2009. Even though the prices have been declining, London is still the most expensive place in the whole country for anyone looking to buy a home as the average home price is still over 462 thousand pounds.
Nationwide Building Society named London the U.K.’s worst performing region in the first quarter of 2019. The number of mortgage approvals is falling and asking prices are quite low.
Portico estate agents inform that the average London estate agent fee reached a staggering 7,039 pounds, which is why they decided to call people to try and win a chance to sell their property for free. Even selling a home in London isn’t easy nor cheap.
The situation at the London’s property market is far from ideal, but things are changing for the better and apparently, some of the city’s estate agents are also fighting a good fight.
The biggest and fastest growth of house prices in London was observed during the 6-year period between 2010 and 2016. It seems only reasonable that the demand falls as people are struggling to afford the prices that are constantly growing. As the demand falls, the prices are being corrected to the more reasonable amounts – it’s simply a natural cycle.
The recent changes have had a warm welcome, but it’s not over yet. Far from it. Marc von Grundherr, director of Benham and Reeves, said that:
“Affordability is arguably the biggest drag on the market as, despite sluggish price growth as a result of Brexit, many still struggle to raise the capital required for a mortgage deposit.”
Also, as can be seen in the Housing in London 2018 which was written by Marcus McPhillips and James Gleeson:
“Comparing the household incomes of tenants (social and private) to the price distribution of new build homes for sale, the cheapest 80% of new homes are affordable to only the top 8% of renting households.”
For comparison, in March 1975 the average London house price was 10,765 pounds while today that number is over 460,000 pounds. That means that the agent fee in 1975of 1.5 percent was 161.47 pounds, while the same 1.5 percent fee today is 7.039 pounds.
The numbers are staggering, but it’s good to know that changes are coming and that there are estate agents who are trying their best to make selling and buying property in London a bit easier.