Demand in London down 2%

Mortgage Introducer

July 4, 2016

London

Property demand in London was down 2% to 39% in the second quarter of 2016, the National Hotspots Index from hybrid estate agent eMoov.co.uk has shown.

Despite the initial artificial spike in demand ahead of April’s stamp duty deadline, the changes to tax brackets for second home and buy-to-let properties seems to have had a detrimental impact on London property demand.

Removing this decrease in the London market from the national picture sees the increase in demand for property elsewhere around the nation increase by a notable +8% since Q1, now at 40% overall.

Demand for housing in prime London areas has slowed

Despite demand cooling across the capital, the London Borough of Bexley remains the hottest spot in the UK for property demand. At 71%, demand for property in Bexley is the highest across the UK, although it has cooled by -7% since the start of the year in line with the decrease felt across the capital as a whole.

Bristol remains the hottest spot outside of the London bubble, with demand increased, albeit marginally, to 69%. Bedford (67%) also retains its place as the third hottest spot in the UK as commuter zones around the peripherals of the London bubble continue to grow in popularity, due to the inflated price of homeownership in the capital.

Aylesbury climbs two places to fourth hottest spot, with demand now at 64%, with Medway (64%), Ipswich (61%), the London Borough of Sutton (61%) and Watford (61%) all retaining their top 10 statuses.

Both Cambridge (21st) and Milton Keynes (15th) go crashing out of the top 10 and are replaced by Northampton (64%) and Coventry, where property demand is currently at 58% resulting in a rare appearance in the top 10 for the West Midlands.

The Scottish capital continues to lead north of the border, with Edinburgh (54%) the 18th hottest spot ahead of Glasgow (48%) in at 34th. This is also the case in Wales, where property demand in Cardiff is currently at 44% making it the 44th hottest spot in the UK, with Swansea trailing way down in 90th place at just 27%.

It’s not all doom and gloom across the capital as Kingston Upon Thames (+59%) and Southwark (+47%) are two of only five boroughs to have seen a positive increase in property demand levels since Q1 and are the first and second largest increases across the UK respectively.

There has also been a resurgence for property demand across the North East after a tough year for homeowners in the region.

Stockton-on-Tees (+47%), North Tyneside (46%), Gateshead (+42%), Durham (+37%), Newcastle (+32%) and bitter footballing rivals Sunderland (+23%) have all enjoyed some of the biggest increases in property demand since Q1. Trafford flies the flag for the North West with demand up +45%, with Calderdale (+38%) in Yorkshire completing the top 10.

At just 12% the London Borough of Westminster continues to prop up the table, joined by its prime central London neighbours Kensington & Chelsea (12%) and Hammersmith & Fulham (17%), as well as Camden (20%) as some of the coldest spots in the UK for property demand. Despite its slight revival in Q1, demand for property in Aberdeen is also woefully low at just 13%.

Founder and CEO of eMoov.co.uk, Russell Quirk, said: “The changes to stamp duty tax brackets for those looking to secure a second home or buy-to-let property seem to have hit the London market harder than the rest of the UK.

“Despite London tending to drive the UK market as a whole, it would seem for once, it has taken a back seat whilst the rest of the UK has enjoyed upward growth on the first quarter of this year.

“That said national demand is still lower than the levels seen at the back end of last year and the big decider on which way it goes now will be Britain’s choice to leave the EU.

“There has been a lot of talk about the consequence of this vote on the UK property market with many forecasting a detrimental impact on house prices. We don’t believe this to be the case and I’m certain that come Q3, our index will show a further increase in property demand across the nation.”