The annual house price increase has risen every month over the past year. This is the longest stretch of year-on-year rises since the beginning of 2017 as London enters a strong spring sellers’ market.
During the pandemic, London’s housing market was impacted by the “race for space” to the suburbs and a lack of overseas buyers. However, as we put lockdowns and COVID-19 restrictions behind us, the UK’s capital is confidently reestablishing itself as one of the world’s strongest locations for property.
Prices in London surged by 7.4 per cent at the start of this year, the fastest annual rate of growth since 2016, according to new figures. Mortgage lender Nationwide said the average cost of a home in the capital hit a new all-time high of £518,333 in the first quarter.
In this week’s blog, we’re exploring the resurgence of the London property market.
The race for space
Working from home became the ‘new normal’ in 2020, prompting many purchasers to reconsider their desire for extra space – whether it was for a study, a garden, or just more space in general. While moving away from business centres makes sense in a world where people are in the office less, there are other factors to consider.
Many workers are now realising that by moving into the countryside, they’re leaving behind the amenities and creature comforts found in a city. Country properties also often listed or heritage buildings, restricted by certain laws – which means buyers have to do considerable research before a purchase.
Despite this, it is clear that people still want outside space – even when moving to London. This is evident in the fact that flats remain harder to sell when compared to the popularity of city houses.
The stamp duty holiday
The stamp duty holiday had far more impact in other regions than in London. It wasn’t until the end of the break in the autumn did the city’s house prices start to bounce back, as overseas investors and many who moved out of the capital returned with “buyer’s remorse”.
More demand than supply is always an indicator of whether there will be strong growth in the market – and this shows no signs of changing in London. With supply still 40% below pre-pandemic levels, estate agents claim that they’re witnessing bidding wars between 20 buyers for one property. This should continue to fuel growth in the London property market throughout 2022.
The great return to the capital is clear through the persistent growth in the sector. As vaccines came and restrictions went, London was once again seen as one of the best places to be and enjoy life as normal. Despite the resurgence of COVID, this should continue to buoy the industry, particularly as more and more residents decide to return to the capital.
At Targetfollow, we recognise that the pandemic has accelerated change within all industries – and with this change, comes a new plethora of opportunities. If you’re looking to invest in property, view our assets currently on sale.