London house prices appear to be stabalising according to after a period of rapid growth. That’s the finding of the Royal Institution of Chartered Surveyors’ latest Residential Market Survey. While nationally 50% more Rics members reported a rise in house prices than didn’t, the figure for London was 3%.
In addition 28% more predicted a fall in values over the next three months.
The picture is not quite so simple, however, with a net balance of 43% of Rics members in outer London boroughs felt that prices had risen while 20% more surveyors in central areas said prices had already fallen.
Rics chief economist Simon Rubinsohn said: “Anecdotal evidence has suggested that a combination of exogenous factors is contributing to the overall picture in prime London, with tax changes, foreign market slow-downs and uncertainty over Brexit all being mooted as potential reasons behind the changes in demand.
“This is not necessarily indicative of the long-term market and the depreciation of the pound could encourage overseas investors back in to the market as could the outcome of the European referendum.
“The challenges facing the top end of the capital’s property market are clearly visible in our latest results.
“However, it is evident that the broader London market remains firm in the face of the on-going shortage of stock and pent up demand.
“Although agreed sales in February were strong, the dip in new buyer enquiries suggests that it might be reasonable to assume a slower market in the spring as a result of this change.”
The survey also uncovered “major variations in price expectations” depending on the size of the property with larger properties (four bedrooms or more) predicted to show more sluggish growth than smaller one and two-bedroom homes, which could be a legacy of the Stamp Duty changes.
In the lettings market, tenant demand fell for the third time in four months, with London surveyors seeing also seeing a fall in demand for lettings. At the same time, landlord instructions increased at a faster rate with 11% more surveyors seeing an increase in instructions.
Rental expectations, have also seen a slowdown in growth with only 7% more surveyors in the capital expecting to see prices rise over the next three months, in stark contrast to the national average of 35%.
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