Is Golden Age of London Property Over?

There has been a consistency to the reporting of how prices have been behaving in the London property market of late and many different media outlets seem to be saying that the "golden age of London property" is over. Naturally, this raises many questions and issues amongst a lot of people. You will have people who will question whether London has been enjoying a golden age at all. There will also be people who believe that there is plenty of positivity left in the London property market.

Property consultancy firm JLL has grabbed a lot of publicity through their proclamation that there will be an end to the "Golden age of house prices" while stating that the growth of house prices in the next five years will be slower than the growth seen in the past 20 years. The organisation has predicted that property values will grow by just 1% in the United Kingdom in 2018 while they have stated that London property values will fall.

There is no denying that there are many factors present in the present day which could have a negative impact on property prices, such as:

•    The Bank of England increasing interest rates
•    The continued uncertainty of Brexit and its impact on the property market
•    Predictions that the mortgage market will become harder for people to obtain a mortgage
•    Concerns over the long term availability of the "bank of mum and dad"
•    An increasing number of limitations placed on landlords and property investors

When you bring all of these aspects together, it is easy to see why many property specialists believe that things are changing for the worse but when it comes to the property market, there is one factor that cannot be ruled out quickly. Given that there is an insufficient level of supply of property in the UK market, it is likely that prices will remain at a certain level and won't fall by any great deal.

Some areas in London are due for a dip in prices

If you are looking at the golden age of London property, there is no doubt that some people will say that some parts of London are due a dip in property prices. If you were to ask someone who has been unable to afford to buy London property, they would see the end of the golden era as being a hugely positive thing because it may allow them to get on to the property ladder.

It should also be pointed out that while some parts of London are due for a dip in property prices, there are still many places that have plenty of growth left in them. The increasing interest in Outer London areas shows that there are still areas in high demand that are affordable, for the moment. You can even consider the East of London as there are many areas which are still being developed at a fast rate, and these locations will likely see a rise in property prices. You also shouldn't forget that Crossrail 2 and other future transport projects will create more desirable areas which will push up the average price of property in many areas of the capital.

Another factor to consider is that if the UK economy struggles to an extent that people may decide against buying homes in such a notable manner, you will likely find that economic conditions are more attractive for foreign investors and buyers. This means that any dip in demand for property from UK residents will be offset by increased interest from external buyers, which means that there may not be much of a noticeable impact on the sector.

It is best not to consider London as a single entity when it comes to the property market

If you are looking at London as a single entity, and the fact that some of the more expensive or affluent areas are likely to experience a dip in property prices, then yes, it can be argued that enough of a change will occur to say the "golden age" is over. However, there are so many different parts of London, all of which have their own characteristics and features that mean that there will likely always be areas that see their prices rise. When you come back to the fact that there is a lack of affordable housing, areas that are in high demand will likely see prices rise.

Even when you move away from the headline grabbing statement, JLL point out that this is likely to result in the London, and UK, property market returning to a level of stability. In many ways, this should be seen as a golden era because it will bring benefits to many people. In a stable economy, there may no longer be the scope to make huge profits by flipping property in a short period of time, but the consistency in the property market may make it easier for people to find and buy the property that is right for them.

If you are looking for genuine insight about the London property market from a company that knows and cares about local communities, be sure to get in touch with Unico Property Group.