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London house prices dip just below all-time high amid predictions of summer bounce back

·2-min read
 (Daniel Lynch)
(Daniel Lynch)

London house prices dipped slightly in May but remain within touching distance of all time highs, according to official data published today.

The average cost of a home in the capital fell 0.65 per cent in the month to stand at £497,948.

That is less than £7,000 below the record £504,384 reached in March but £17,000 above the level at the start of the pandemic in March last year.

The annual rate of increase remained steady at 5.2 per cent, the slowest of any region in the country for the sixth consecutive month, the data from the Land Registry revealed. “As soon as the capital opens fully again, we are confident the property market will burst back into life.”

Agents said they were seeing signs of recovery in the London market and said they expected a busy summer despite the phasing out of Rishi Sunak’s stamp duty holiday from the end of last month .

George Franks, co-founder of London-based estate agents, Radstock Property, said: “London rising the least will see it fall the least as the stamp duty froth comes out of many parts of the UK property market.

“The London property market could have the last laugh.

“Even though the stamp duty holiday is as good as behind us, the shift towards homeworking will continue to drive activity during the second half of the year and beyond, as our lives recalibrate to a new normal.

“The fast-approaching end of the furlough scheme is a clear hurdle but the fundamentals underpinning the property market remain strong. It’s phenomenally cheap to borrow, far cheaper to own than to rent and there are still too few homes being built.”

Marc von Grundherr, director of agents Benham and Reeves, said: “While London continues to trail the rest of the market, we’re beginning to see the cogs start to turn, driven by a return to the workplace and preemptive demand from foreign buyers in anticipation of a move later in the year.

“As a result, the London property market will continue to build momentum long after the carrot of a stamp duty reprieve has been removed.”

Lucy Pendleton of London estate agents James Pendleton, said: “London may have seen the slowest growth of any area over the past year, but there are also positive signs it’s finally waking from its slumber, as more restrictions have been lifted.

“And while the legacy of the pandemic is likely to see many businesses adopting flexible working policies, and fewer people having to commute into work full-time, the bright lights of the big city, and what it has to offer, still has a tremendous appeal.”

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