Just last month the news was full of how property prices were continuing to rise. In fact, London enjoyed about 18 months of accelerating house prices. However, at the very beginning of August, the reports on the July market are just rolling in and we are seeing many in the media reporting that house prices are down, as are mortgage approvals. However black and gloomy these reports may seem, they are to be expected and are certainly not a reason to panic.
Doom and Gloom
Many in the media have pointed their fingers at the election and the emergency budget as cause for concern, but neither seemed to really affect the housing market. Other commentators have been talking about the possible negative effect of a 50% rise in capital gains tax, but let’s remember that just a short while ago the capital gains tax was 40% and there was no real ill effect then.
Many experts have blamed the recent abolition of Home Information Packs (HIPs) for the sudden influx of properties onto the housing market, thereby causing an imbalance in supply and demand. With so many new properties being offered for sale, some like Rightmoves’s CEO Miles Shipside believe that “sellers are going to have to price at bargain levels and bullishly promote their properties in order to stand out from the crowd”.
What the News Won’t Tell You
With all this negative publicity floating about it is no wonder that some people might be worried. However, there are a few important points to consider. First of all, July and August are always quiet months on the London property market. Come the summer months London’s streets empty as everyone tends to flee the capital for sunnier climes for the duration of the summer holidays. This very simple and true point never makes it into the news however, as it certainly is less newsworthy to say “the market has slowed down because everyone is on holiday”. We won’t be able to see what is really happening to the market until early September, when London will bustle again with returning holiday-makers.
The Rental Market is Strong
While house sales always take a seasonal holiday along with Londoners, the rental market usually experiences a strong month in August. This surge in rentals is usually due to students seeking accommodation for the school year. Currently, the London rental market is very strong with not only students buoying up the market, but a return of corporate clients seeking London homes for their relocating staff.
If you are searching for rental properties, click here to see what Northfields currently has available. As the rental market is so strong in August, we recommend that your register with us, so that we can tell you about properties as soon as they become available, call 0208 567 6660 or register online.
For those buy-to-let investors, a strong rental market means that they will receive better returns on their investment, making it a good time to add to their portfolios.
If you are looking to buy investment property, click here to see the properties Northfields is currently offering for sale. Call us now on 0208 840 6666 to register your details and we will keep you on our investors list, so that we can let you know when properties with good returns become available.
Mortgages are at their Cheapest for 35 Years
The media will of course, take pains to report that it is very difficult to get financing in the current market. While it is true that it is now necessary to have a large deposit to secure the best mortgage rates, the media is failing to impart the good news – the Council of Mortgage Lenders reported recently that homeowners are currently enjoying mortgage repayments that are the lowest percentage of their income for 35 years. Added to that, it looks highly unlikely that interest rates will go up in the near future, which is good news.
With London in the grips of the quiet summer months the property market will slow down slightly. With more properties coming to the market after the drought of new stock during the credit crunch, prices are indeed calming and the balance is redressing itself. Upward price movement cannot continue indefinitely and the current plateau of prices will certainly help buyers and keep property transactions moving. Let’s see what changes September may bring and remember you will never see the headline “The property market is calm due to the summer holidays and a natural correction of the market”. However true it may be, the truth just doesn’t seem newsworthy.
To keep up to date with the property news in Ealing, read our blog www.news.northfields.co.uk