Here’s an excellent article from the Independent. London property prices are headed south.
Source: London property prices set to drop in 2018 – The Independent
The thing is, there will be winners and losers. It’s a no-brainer that the top-end of the residential market has taken a dim view of Brexit. But some estate agents dealing with the top-end are trying to argue that for the very big deals price is not a limiting factor. Would you believe an estate agent?
Londoners and those invested in London’s residential property need to look to the hard evidence. The evidence is highlighting a weakening market, with demand influenced by the fears of highly paid financial services staff that their jobs are going to Frankfurt and Paris. Let’s face it the Brexit referendum and Theresa May‘s weak leadership will be the trigger for the next UK property crash. We’re a long way from Margaret Thatcher’s sale of council homes – the current Conservative Government is the exclusive preserve of the very wealthy.
But remember there are opportunities in falling markets too. Like the sub-prime crash in the US, expect the weakest and the most highly geared to suffer the most financial damage, returning the keys to greedy lenders. Of course, it’s not just weakening property prices. We need to factor in the growth of credit card borrowing. Whilst Theresa’s May’s government continues to dream, expect radical intervention from the Bank of England.
Should we feel sympathy for over-extended London property borrowers?
Dr Alf raises interesting issues concerning London’s housing market but there are other factors at work.
George Osborne’s stamp duty changes ameliorated by Hammond in the Budget are not fully ameliorated at the top end so this has the effect of exerting downward pressure on house prices in London but not it seems around Cambridge and my part of Hertfordshire or along the site of the new Varsity(Dr Beeching closed the old one), line from Oxford to Cambridge which the 2 universities have bought land either side of to house business parks ,new Garden Cities like Letchworth.
BREXIT will mean fewer construction workers ,longer building lead times and restrictions on mortgage lending and the desire of the Banks to pretty up their balance sheets with high house prices.
The Government still isn’t keen on systems building or building skyscrapers like Singapore or building underground and the proposed rate of build ,300,000 houses a year versus a population growth of 400,000 a year does not suggest falling house prices or an overall crash.
The current housing shortage is 12.5 million which at even 500,000 houses a year would take 25 years to clear even if the population figures were accurate and population growth was static.
On present performance at say 200,000 houses a year with some population growth and 8 million illegal immigrants based on the amount of food sold in supermarkets and notes and coins in circulation it will take 60 to 70 years just to clear the backlog.
Rent controls will not increase housing supply either,nor will ministerial pressure on pensioners to downsize ,this last because there is no alternative provision in the form of smaller houses.
Unless this shortage of housing is addressed along with action to speed up planning consents and the willingness of developers to actually build I see slower growth in house prices but no collapse.