London slowdown dismissed as media hype
London house prices dropped by 0.5% between May and June according to Rightmove’s latest House Price Index.
But Edo Mapelli Mozzi said: “There has been a significant amount of media hype in recent weeks about a slowdown in London’s property market.
“In my experience, this is nothing more than the usual ‘cooling off’ that occurs as summer approaches every year.
“The market always hots up in spring and vendors who have been trying to sell for a while will inevitably bring their asking price down to shift their property before the stagnant summer period.”
David Whittaker, managing director of Mortgages for Business, disagreed that such a slowdown is seasonal however.
He said: “It’s too early for seasonal stuff. You get the market going soft in July and August time.
“April and June is where the market runs steady.”
The average price fell to £589,776 on the month, yet asking prices are still up by over £70,000 from June 2013, a 14.5% increase.
Mapelli Mozzi reported how the population in London is growing by around 100,000 a year, yet only 24,000 new homes are being built to meet demand.
He added: “There may be a slight cooling off at a hyper-local level, but on the whole, the London market is as fiercely competitive as ever.
“Securing properties for our clients is still exceptionally challenging, and one consequence of this we have identified is that at the PCL level, sealed bids are becoming the norm, rather than the exception.
“Whilst news that there is a bubble that is about to burst is likely to grab headlines, the truth is that there is still a significant shortage of homes in the capital.
“It’s no big news that purchasing a property in London is extremely difficult – it’s been this way for a long time and more so in recent months.
“But until planning laws are relaxed and building takes place in London on a vast scale, we are going to have a high demand for housing, and as a result the London property market will always be competitive. But the idea of the market reaching stagnation is just simply media hype.”
David Whittaker does expect the rest of the property market to catch up with London however.
“I think what you’re seeing is a topping out and a glass ceiling is being reached,” he said. “In some parts of London property prices have seen a natural limit which will allow the rest of the country to catch up.
“It’s about time people put the blinkers off and looked at the greater picture.”