Lack of stock and increased demand define London housing market

Ed Mead, Director, comments:

“Despite speculation that house prices would fall in 2011 it has been a positive start to the year for the London sales market with the highest number of applicants we have seen in over a year and three times more than we saw in December.

“It’s not uncommon to see an increase in both buyers and sellers in January but it appears that many of those buyers are now genuinely ready to enter the market having realised that mortgage rates are on the way up and therefore having booked their rates they now need to spend within six months.

“Lack of stock remains the key issue for the London sales market with our figures showing almost five buyers for every property available for sale. This lack of stock continues to be caused by the inertia of low interest rates and consequent low mortgage rates. Perhaps the spectre of interest rate rises will now shake the tree and perhaps we will see more sellers taking the plunge.

“It is our contention that prices may well rise by at least 5% this year which may perhaps give buyers an extra incentive to feel they are buying at the right time.”

 Virginia Skilbeck, Director, said of the London lettings market:

“As in the sales market, the London lettings market is also experiencing high levels of applicants with a lower than average number of properties available to let.

“Good quality properties in popular areas are being let at the highest rates seen in the past few years, with some properties being let within hours of coming to the market.  The continuing lack of properties for sale has caused many buyers to remain in rented accommodation, increasing the number of renewals.

“With the rental market continuing to strengthen over 2010, buy-to-let investors have returned to the market and we have had enquiries from both sophisticated and amateur investors this year.”

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