Optimism For London Property Market

2020 could be a great year in the London housing market, and there is significant optimism amongst many professionals.

It is fair to say the start of 2020 has seen more people optimistic about the housing market than many years. Talk of a Boris Bounce may have abated, but there is certainly cautious hopes that people will be able to step on to the property ladder.

Leading housing market analysts in the capital have pinpointed a number of factors which are likely to lead to a “boom” in the market. Some of the key points tipped to welcome an improved era into the London market include:

After being adjusted for inflation, the fall in prime London central prices (a 28% drop from 2014 to 2019) is similar to periods in 1992 and 2008, which were previous troughs in the market.

The period between 2014 and 2019 reflects a five-year recession, which is the longest recession in the last 30 years. This has led many market analysts to state an improved state of affairs is long overdue.

There is a chance to trade up in London

With prime market London prices reaching a 10-year low, in comparison to mainstream London property prices, there is a chance for people to trade up, and this can stimulate growth in the local market.

Rental values are on the rise, and many industry experts believe this will continue to be the case. This will see some people force themselves to make the transition from being a tenant to property owner.

There is set to be a change to housing supply in central Zone 1 in London, based on information contained within “construction starts” data.

In 2020, mortgages are relatively cheap, and the cost of a market has fallen by nearly 40% since the market peaked in 2014.

The March Budget will be of interest to the housing market

Many people are looking towards the March Budget to see what changes, if any, will occur. In their manifesto before the General Election, a lot of promises were made by the Conservative Party, and it will be interesting to see if these promises are followed up on.

Fraser Slater is the chief executive of buying agency Ludgrove, and he says: “With a vastly improved political backdrop, the threat of a hard-left government removed and Britain's transition out of the EU settled, we expect 2020 will be the year the prime London property finally regains its mojo. Strong pent-up demand, limited stock availability and the backdrop of a record five year-long property bear market is likely to provide upward momentum and we forecast prime London prices and volumes to grow around 10 per cent and 20 per cent respectively in 2020.”

We all know the past five years have been challenging, but if there is optimism now, hopefully this will be translated into a more productive period. Slater continued by saying; “The last five years has seen an almost perfect storm of negative news flow affecting prime London property, and we are now confident a sunnier climate is on its way. Having studied past bear markets as a former fund manager, market bottoms are characterised by extreme negative sentiment, despondency and despair with the recovery in price typically being a function of an amelioration of negative news flow and fundamentals.”

While the housing market improving is good news for the economy, and many people, there is still a need for the lettings industry to be supported. Regardless of how easier it becomes to buy a home, many people will still find themselves struggling to afford property, so there needs to be support for landlords and tenants too.

If you are a North London landlord, or a tenant in this part of the capital, we can help. Contact Ariston today, and we will do everything we can to ensure you are supported, regardless of what happens in the property market.