Record month for London property in January 2014
The London real estate scene is a seller's market at the moment, but it's hard to tell how long the upward trend will last.
We've been through an extended period of stagnation in the housing market, but the early indications are that serious growth is set to return during 2014, particularly for properties in the nation's capital. Estimates from the EY Item Club say that the average house price in London will rise to £600,000 by 2018, a jump of nearly £200,000.
The capital continues to outstrip the rest of the country, both in terms of the average house price and the level of the mortgages that buyers are willing to commit to. Strong demand and a lack of supply are inflating prices at a sharp rate, leading some analysts to speculate that a London-centred crash could occur sooner rather than later.
The most expensive properties in London continue to attract interest from overseas, as foreign investors see these houses as a safe bet for future years. A recent estimate suggested that as many as 70-80 percent of properties in the capital were selling to foreign buyers, including the limited number of new builds coming onto the market.
There are downsides to this boom though: some of the more high-end areas of London have been left looking like ghost towns, as house owners spend most of their time in other parts of the world. Meanwhile, the properties that they've invested in continue to rise in price as the months go by.
Nearly half of all prime properties in the capital sold during January went for their asking price or higher, statistics from estate agents Marsh & Parsons show.
Low interest rates and competitive mortgage finance mean that more and more people are being tempted back into the market to make solid investments. At the moment it's very much a seller's market in London.
Currently, over a third of London properties are sold within two weeks, with sellers getting "jackpot" prices in the words of Marsh & Parsons CEO Peter Rollings. He expects the boom to continue for the near future, though the market may well have balanced itself out by the time that spring arrives in earnest.
More interest in the market means more work for estate agents and legal teams, as buyers and sellers rush to do business. Conveyancing services such as those offered by the Co-op mean that interested parties can dot the i's and cross the t's with the minimum of fuss, if the rest of the deal is in place, creating a ripple effect that benefits businesses as well as home owners.
It seems that many more of us are taking the decision to buy or sell now that the Christmas and New Year break is out of the way. Rightmove reports that the 1 percent rise in house prices across the country in January is the biggest in a decade. The rise was most pronounced in the capital.
With such rapid rises being logged, it's wise to be cautious about the future stability of the market as we move through 2014. First-time buyers are particularly feeling the strain of climbing prices. It's good news for current owners though, who are seeing the value of their properties start to move in the right direction.