Housing Boom Continue in London

This is $ 1 million question whether the housing boom will continue in London in 2019 or not. This question is discussed at every meeting of London property management companies; it does not matter whether the meeting is held in London or elsewhere.

In order to understand it, we need to understand a bit of context.

A tale of the market

Nearly every newspaper is talking about “UK house prices”, but that is not helpful because London is a massive outlier, which obscures what is happening in the other parts of the country.

According to the UK housing market Observatory report, house prices in East Midlands is three times than the disposable income. The same applies for most of the UK regions. Another report states that approximately half a million households reported in negative equity.

Many people criticize the methodology of this observation. In order to understand it, let us have a look at what is happening on the ground level. Several people claim to buy properties at below prices than that of a decade ago. They have mentioned the dynamic city centers, not the remote villages or the parts of the northeast in their reviews.

In some parts, low supply has increased the prices, whereas affordability remains reasonable.

I am not an economist, but there are a few factors, which are responsible to push the prices.

  • After the crash when the investment on other assets plummeted, London housing acquired a safe place for investors from around the globe. Big investors purchased properties at prime locations (in most of the cases they left it empty). This contributed in a ripple effect and made those people who actually wanted to live, purchase properties further out.
  • London is one of the most sought after cities of the world, but its growth is restrained by the Greenbelt and certain planning restrictions.
  • Although I do not have statistics, many new jobs were created after the recession.

Constrained supply with domestic and international investment, London housing is much likely to notice price spikes. London property management companies believe that property in London is overvalued and speculators are further pushing it.

Will there be a house price crash?

If you take a whole of the UK together, then there may be a reverse ripple. This will affect the overall figures of the UK up to a certain extent. However, there are certain regions in the UK, which are beyond the ripple belt. In those areas, there will not be a house price crash, not even in the coming years.

Let us understand why this is because a crash will take place when many people will sell their properties. In the present scenario, there is no clear indication that the supply is going to increase in the near future. A small percentage of sellers may do

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