Personal Loan Store Logo
UK Loan Comparisons























London House Prices Slip

London house prices have shown signs of slipping for the first time this year. Asking prices in the capital are often seen as the engine of the property market across the country.

The last 12 months have seen five interest rate rises, taking the rate from 4.5% last August to 5.75% currently. Other regions showing a distinct market chill are the West Midlands, North of England, and the South West.

There has also been a drop in the number of properties coming onto the market. One of the reasons for that could be the introduction of the Home Information Packs at the beginning of August, at a cost of around £500 a time. Industry leaders believe this will have stopped some people coming to market. Rightmove counted ony 148,000 properties were put up for sale during the last month in England and Wales - the lowest level since the beginning of the year. Meanwhile, the average time taken to sell a house rose to 85 days, up from 80 days in July.

First-time buyers have watched house prices grow to such an extent in recent years that most of them have been priced out of the market, and are having to wait much longer before they get onto the first rung of the property ladder.

Any price drop in London is seen as significant as homes in the capital have previously seemed immune to falls seen elsewhere in the country. London has seen a steady flow of immigrant workers, rich foreign buyers and a rash of cash to City workers in bonuses. Coupled with a shortage of property, this has helped to maintain an upward push on property prices.

Miles Shipside, commercial director at property experts Rightmove, thinks the situation may be changing. He said:“This fall is the first we have seen for some time and is an early warning signal that even the buoyant London economy is susceptible to market forces. The fall was only slight, at just 0.1%, but has to be seen against the fact that London prices have risen by an average of 2% a month for the last 12 months.” Rightmove believes the situation in the capital will be reflected across the rest of the country.

In London the average asking price is now £394,268, up by 23.4% in 12 months, but down by £462 on last month.

Rightmove also saw falls in West Midlands (2.2%) and North of England (0.6%), while the South West was unchanged.

It may be that there is now a shift from a seller’s market to a buyer’s market in many parts of the country.

The chaos in the financial markets in the past two weeks may also signify greater problems to come for mortgage owners, as it could mean less access to good value mortgages. There may be an increase in mortgage rates, without the Bank of England having to raise its own base rate.

Rightmove reports that the average asking price has gone up by 12.8% in the last year, but predicts that it will probably come down to 3 or 4% in future months. This, Mr Shipside believes, will lead to a more sustainable market without the need for further interest rate rises.

Tom Smith
24th August 2007

Recent News:

  • Unanimous vote to keep interest rates on hold [22.08.07]
    According to the minutes recently released from the August Monetary Policy Committee meeting the decision to keep interest rates on hold earlier this month was a unanimous one.
  • Banks could be sued by IVA companies [22.08.07]
    According to a recent report a number of IVA companies are looking into suing UK banks for hindering the IVA process and therefore promoting an increase in the number of bankruptcies within the UK.
  • Calls For Stamp Duty Reform [20.08.07]
    New Chancellor Alistair Darling has been called upon by experts in the property industry to give stamp duty a complete overhaul after figures showed that 60% of first-time buyers are having to pay the tax.
  • Sub-prime Crisis Affects Global Markets [20.08.07]
    It seems that the problems in the US with sub-prime markets may be reverberating around the world. These days it is virtually to limit a large financial crisis to one country.
  • Slow down in rise in personal insolvencies [18.07.08]
    The rise in personal insolvencies in England and Wales has taken a dip in the second quarter of this year.
  • Consolidate your way to financial freedom [18.08.07]
    According to one financial adviser in the UK many consumers could find their way to financial freedom more easily by consolidating their existing debts.
  • No Rise In Interest Rates - MPC [17.08.07]
    In August the Bank of England’s Monetary Policy Committee (MPC) voted to hold UK interest rates at 5.75%, the level set the month before. The 5.75% rate was the highest since March 2001 and represented the fifth rise in twelve months, having taken the base rate from 4.5% last August.
  • Homeowners adding value to their homes with loans [17.08.07]
    Over recent years secured, homeowners loans have become increasingly popular in the UK, and one of the leading factors in this rise in popularity is the growth in property prices.
  • HIPs: Not Enough Work For Inspectors [15.08.07]
    Home Information Packs (HIPs) have been in place for less than two weeks and they’re under fire once again. HIPs were introduced on 1 August for properties with four bedrooms or more, but most of the inspectors have yet to complete a single job
  • Global Market Crisis [15.08.09]
    It seems the US sub-prime crisis has finally spread around the world – with a vengeance. Global stock markets took a hammering last week as a knock-on effect from the problems that started in the United States

 

Early Redemption Penalties - Loan Extras - Debt Consolidation Bad Credit - Choosing a Personal Loan - Loan Penalties - Money Saving Loan Tips - Loan Reviews
Site Map - About Us