Economy

How has the London property market changed in the last decade?

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Photo: Pixabay

The economy has experienced many peaks and troughs over the last decade filling many people with uncertainty regarding the future of the property market.

Tax changes and political instability have produced hurdles that needed to be overcome, but the property landscape continues to be resilient going forward.

House price growth has begun to slow down, and in some cases even plummeted to a negative figure.

London stands as one of the worst hit areas of the country as people are avoiding the capital due to unaffordable housing, therefore this area once littered with property gold, seems like it has lost its shine.

London was once regarded as a hotspot for property investors from the UK and overseas as the city attracts wealthy residents due to its relentless student numbers, growing affluent population and strong financial industry. However, over recent years the property market in London has been put under immense pressure as prices have sky rocketed and profit margins have dwindled from poor rental returns. This stagnant property market in London is even more evident if you compare it to its successful northern counterparts.

In March 2018, London was highlighted as the weakest region in terms of house price growth. The recent findings stated that the UK house prices fell for a second month in a row.

Nationwide chief economist, Robert Gardner, who fashioned the report stated,

“Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.

Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market active and house price growth this year.”

Research also drew attention to the North of England, which received stronger annual house price growth than the South for the fourth quarter in a row. The South experienced the slowest growth since 2012. The North-South divide is apparent and due to ambitious schemes like the Northern Powerhouse initiative changing the landscape, the gap may be narrowing as London fails to keep up.

The demand for property in the North is increasing compared to the South, as many are leaving southern regions to take advantage of lower house prices up North. In London prices were down 1% compared to 2017 and it was recently discovered that over half of London postcodes (54%) had registered annual house price falls.

London property is unobtainable for many, as the average property price exceeds half a million pounds at £555,000. Not only are these properties standing unreachable for those already on the property ladder, but they remain even more distant for those buying their first home. As one of the most affected regions for falling house prices, London’s dip in prices are the opposite of some other top performing cities in the North. Liverpool, Manchester and Leeds are powerhouse cities offering fruitful return on investment, providing high rental yields of 11.79% found in L7, as London yields trail far behind.

Instead of predicting the market, and making uniformed decisions on the potential of your next property investment, it is important to seek advice from those experienced and take help from property investment specialists like RW Invest as due diligence is thoroughly performed to ensure the best investment.

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