With house prices expected to fall over the next year, and decreases in interest rates also forecast after the autumnal general election, the London property market has seen a sudden increase in activity. Could 2024 be the year to invest?
Are we in for a busy spring selling season?
We have recently seen a sudden increase in activity within the London Property Market, with new data from Rightmove hinting at a busier than expected spring selling season.
According to the property portal, London has seeing the largest increase in demand to buy this year. Within the first two weeks of January, demand to buy was up by 19% compared to the same time last year. It is reported that the number of new listings has also increased by a similar figure. But what is the cause of this influx?
Interest Rates Set To Fall
It is believed that this unexpected activity is likely due to the financial market foreseeing five consecutive interest rate cuts, set at 0.25% each. We can expect the first to come just before summer - significantly earlier than initially predicted. These cuts have resulted in a surge in fixed-rate mortgage rates, under 4%, entering the market, making it a perfect opportunity for good investment deals. Despite this, barriers for first time buyers are likely to remain, with rents remaining excessively high within the capital city.
Whilst experts may have differing opinions on house prices recovering, it's general consensus that we are more likely to see an increase in favourable mortgage deals rather than a downward trajectory in housing prices.
A Good Time To Invest In London?
We could, potentially, be seeing the best conditions that home buyers in London will see for some years - there is an abundance of choice and increased sellers that are willing to negotiate on their asking price in order to secure a sale.
New research from Zoopla reveals that the level of asking price discounts in London has grown from 2.1 per cent in 2022 to 6.1 per cent – which equates to £25,000.
Considering that London is made up of a series of "micro-markets", it is possible to find very reasonably priced properties if you're willing to compromise on the area.
Of the top ten boroughs that saw the highest falls in housing prices, Southwark is the only inner borough; house prices growth has fallen by 2.5% over the last year. The average price of this zone 1 / 2 borough sits at £513,900, the same as Bromley, a zone 5 borough. Walkable to the Centre & West End, Southwark boasts a collection of period houses & new builds making it the perfect borough for your next buy-to-let investment.
At Elliot Leigh Guaranteed Rent, we have partnerships with over 20 Local Authorities meaning we offer a competitive rate to landlords investing in London. We pay the agreed fixed rental income each month whether the property is empty or if the tenant is paying or not, meaning void periods and rent arrears are no longer a worry for our landlords. Find out more benefits of our scheme here.