London values rose by 1.9 per cent in June
(Picture: Daniel Lynch)The resilient London property market continues to defy gloomy recession warnings and the cost of living crisis with average prices rising 6.3 per cent to a record £537,920 in the year to June.
Latest data from the Land Registry show London values went up by 1.9 per cent in June alone adding almost £10,000 to the average cost of a home in just a month.
Commentators said the lack of stock on the market, rapidly rising rents, and the desire to grab attractive mortgage deals while they are still available were all factors behind the robust increases in values.
Some of the biggest increases were seen in London’s already most expensive boroughs with prices up 12.2 per cent in Kensington & Chelsea, and 10.8 per cent in Richmond.
Iain McKenzie, CEO of The Guild of Property Professionals, said: “With so much speculation on how the cost of living crisis will worsen, and how household budgets will be squeezed, you would be forgiven for assuming that the property market will experience some significant adjustments. The truth is that the opposite seems to be happening.
“Wages are currently failing to keep pace with inflation and this will have an effect on how much people can afford when it comes to mortgage and rental payments, as well as how difficult it is for first-time buyers to save for a larger deposit.
“Crucially though, it is unlikely that the current squeeze will have any short-term impact on house prices, as estate agents are still being inundated with enquiries for available properties. While rents remain high, many people will be hoping to get on the ladder and achieve the stability of owning their own home, with the savings that can go with it.”
Nick Leeming, chairman of agents Jackson-Stops said: “Pockets of hot markets particularly in the South East and London are achieving fast sales at guide price on a regular basis. Our Pimlico branch, for instance, noted agreed deals were up 20% in Q2 versus Q1, consistently averaging 98% of the guide price for sellers.”
Director of agents Benham and Reeves, Marc von Grundherr, said: “The UK economy is sailing head on into some very stormy seas at present, all while the captain remains on shore leave with no replacement yet to take the helm.
“But despite this, the boat is yet to rock where the property market is concerned and the economic woes of rising inflation, increasing interest rates, and a cost of living crisis continue to bounce off the hull like mere pebbles rather than unforeseen ice bergs.
“It’s inevitable that the property market was eventually going to slow from the high rate of knots it’s been moving at throughout the pandemic, but we’re yet to see any signs of it sinking and this is likely to remain the case.”
Tomer Aboody, director of property lender MT Finance, said: “While interest rates increase, some buyers will take the view that the cost of borrowing remains at a much lower level than at other times, and the fear of further increases will push buyers to fix rates, allowing them to manage their costs while inflation is soaring.”
Nicky Stevenson, managing director at estate agent group Fine & Country, may be of interest: “The underlying reality here is that the boom continues, and on a scale which is remarkable given how many headwinds there are now. Monthly growth has actually remained steady over the last few months
