London House Price Drop: A Slump in Prices

Housing wealth, particularly in the past 10 years, has become increasingly concentrated in London and the South East. As a result of London’s housing stock growth – more than double that of any other UK region in the past year alone – getting on the London property ladder is becoming ever more unlikely for the majority every year. So with London property prices remaining sky high and in equally high demand, where actually is the slump in the capital’s housing market?

The Fall

London was the only region in the country not to record a rise in property prices between February and March. The slight chill in prices comes as a result of an overheated market, where London’s more affluent areas are now experiencing slower monthly growth. Compared to the first quarter of 2014, prices in these areas richer parts of the capital (North West, North, East and South West of the city) fell by 1.5%.

But it is only a slump

Across the housing industry, experts have said that the price drops in London’s luxury market will only be temporary, due to the huge demand for property from overseas and domestic wealthy families, high paid professionals and investors. Lucian Cook, head of UK residential research at Savills, told the Telegraph: “uncertainty regarding the general election and the potential for further taxation of high-value property have contributed to a subdued market in the first part of 2015.” Concerns over the possibility of a mansion tax following the next election mean sales of properties costing over £2 million have completely slowed down.

Not all of London is slowing down

Although an overall slump in London property prices is predicted to continue in 2015, St John’s Wood in North London has registered in real estate firm JLL’s top 3 districts for house sales since the start of the year. Key areas of North London have remained buoyant, in line with the 1.5% predicted growth across the UK by the Centre for Economics and Business. Uncertainty within the property market can cause homeowners to make rash decisions regarding the sale of their house. Often it is sensible to sit tight and ride the storm of house price slumps, especially in a region as coveted as London and the South East.

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