The UK property market generally has started 2016 in very much the same fashion as it ended last year: at the forefront of the business and lifestyle news. And no area has received more coverage than London whose house prices are almost a national obsession. In this piece, we look at the capital’s property trends during the early part of the year and assess whether they are likely to persist in the coming months.
House Prices
Britain’s leading mortgage lender, Halifax, recently announced its latest figures which showed unequivocally that UK house prices are still on the increase. They rose by an astonishing 9.7 per cent in the year to January. It was reported elsewhere that there had been a significant increase in house valuation activity in the first weeks of the year and that the average asking price of a house in the UK has reached almost £300,000.
London, of course, is driving many of these statistics, raising averages quite dramatically. For example, the average asking price for a residence in London is £643,843. Clearly then, the Christmas break wasn’t a drag on the upward trajectory of the London property market.
Will It Continue?
The short answer is “yes” – at least for the balance of this year. Analysts admit that the current buoyancy of the market is being distorted by various factors, notably the buy-to-let sector whose participants are apparently engaged in something of a spending spree, buying up properties for rent before 1st April. This, of course, is when the buy-to-let stamp duty surcharge kicks in. Even allowing for this, however, housing economists argue that the capital’s chronic housing supply problem will continue to drive up prices throughout 2016. The various government measures to increase housing stock will eventually bear dividends, they say, but it won’t happen anytime soon.
Alternatives
The prices, naturally, are prohibitive for many people and they will elect to stay put, perhaps making modifications to their existing properties. Extensions and loft conversions are excellent options for those wanting more space, with the potential to enhance both the appearance and the value of a house. Firms like UK Smart Build a loft company in London for instance, offers conversions in the capital.
At a time when prices are so high, renovation may be worth worth considering.