Prime London house price slowdown predicted
The estate agent forecasted prices will rise by 3 – 5% in 2013, compared to 11.1% in the last twelve months, with the majority of the growth to come in the early part of the year.
Peter Rollings, chief executive of Marsh & Parsons, said: “We’re not going to see the spectacular price rises seen in the past couple of years but London’s prices aren’t going to completely flat line.
“We expect a strong spring market to provide the main thrust for annual price rises as buyers return to the market after Christmas. Interest rates aren’t likely to rise next year and this will keep a lid on forced sales holding back overall sales activity in the year but keeping competition high enough to sustain house prices.”
Rollings added that European buyers would continue to play a key role in price growth as President Hollande’s tax policy and financial instability in Spain and Portugal continued to drive investors to look to other countries for investment
Average rents in the prime areas of London have fallen by 2.8% in the year to date driven by softening rents for properties marketed for more than £2,000 per week.
However the more buoyant sub £1,000 a week market has seen a much stronger performance with annual rises of up to 15% in many areas where would-be buyers are forced into the rental market by a historically low supply of both mortgage finance and properties to purchase.
Based on current trends Marsh & Parsons expects rents in this segment of the market to rise by a further 8-10% in 2013.
Rollings said: “2012 was a mixed bag for the rental market in prime London. Rental growth has been muted at the top end of the market following the disrupted summer and anxiety among city firms. But at the other end of the spectrum property up to £1,000 per week has been performing well and will be a key driver for any rental inflation next year especially south of the river in areas like Clapham, Balham and Battersea.”