Throughout the recent recession, historically low interest rates and relatively healthy London house prices have been two positive factors supporting consumer confidence in the London property market. But with fresh economic uncertainty, continuously low availability of properties and increasing competition from all angles, is now the right time to buy in London?
London house prices still appear to be on the up despite a particularly turbulent period for the money markets over the summer; even before the current crisis both Halifax & Nationwide’s national house price indices have shown that house prices were gradually improving and easing upwards across the UK, whilst in London, prices were shooting up in a market almost reminiscent of 2006.
Interest rate rise predictions have already been revised once this year, with financial experts swiftly amending their 2011 predictions and pushing back their estimations that any interest rates rises will not come in the autumn of 2011, but in 2012 instead. Set against an increasingly fragile economic landscape, predictions have been revised again and now it is a widely held belief that any significant interest rate rise will not occur until spring 2013. Only a substantial growth spurt in the UK economy or a rise in wage inflation may change this scenario.
Gross mortgage lending has remained static in recent months however, the buy-to-let market is improving as rental properties become increasingly in-demand. As a result, The Council of Mortgage lenders buy-to-let statistics have reported that the value of buy-to-let loans increased by 21% in Q2 2011.
Though there has been a rise in properties to the market, this increase has been cancelled out by the influx of new buyers. With interest rates historically low, mortgage rates falling and house prices and buyer volumes expected to increase further, London continues to go from strength to strength, and, whilst not immune to wider market forces, there are compelling reasons as to why now still looks like the time to buy in London.