London’s housing market has outperformed the rest of the UK, with price rises of more than 50% in five years. However, there are indications that the market is now cooling, as Londoners ‘cash in’ and leave the city for less costly suburban homes.
“This could be for any number of reasons,” James Skidmore, Head of Mortgages at AAG Mortgage Brokerage explains. “Most likely is the expectation of mortgage rates rising and the new lending rules cooling the property market.”
According to RICS, estate agents across London saw an increase in instructions to sell homes in June and the biggest drop in people seeking to buy them.
“You can see why London home owners are putting their property on the market; as there are clear financial incentives”, said James. “The average price gap between homes within the M25 and the rest of the UK was in excess of £250,000 as of June, which is, I am told, the widest on record.”
However, it might not be the best time to start considering selling your property, “London house prices stagnated in July, compared to last month, which could be a sign that the market is beginning to slow down.” James explains.
According to a survey of real estate surveyors published by Hometrack Ltd, this is the first time there has been no growth since December 2012. Based on the survey results, the group are expecting home values in the city to fall during the months ahead.
Your home or other property may be repossessed if you do not keep up repayments on your mortgage.