While the previous discrepancies between the north and south in the UK property market have largely been eradicated, the capital of London continues to blaze a trail for other regions to follow. This is particularly true with regards to value, as while there is price growth nationwide London’s projected increase of 20.4% over the next five years remains exceptionally close to the national average. Despite this, it is interesting to note that London’s price growth has begun to consolidate recently, as the tipping point is reached in terms of what the market can bear.
While this is arguably a positive thing for the long-term balance and prosperity of the market, some property owners are uncomfortable with the idea of declining value in the capital. Prime real estate in London may be about to receive a boost from overseas, however, as foreign investors look to escape the tumult of the volatile Chinese stock market. This has helped to maintain demand amid spiralling prices and stamp duty reform, which has had a huge impact on the tax levy applied to homes that are priced above and beyond the £1 million mark.
In this respect, renewed interest from the Asia-Pacific market has come at the ideal time for property owners in the prime London market. Many investors from this region have sought flight after the bubble burst in the Chinese stock market during the second financial quarter, especially after witnessing the impact that this had in surrounding markets such as the Eurozone and the U.S. Given the volume and wealth of investors in the Chinese market, this has driven a significant increase in cash flow through the region and ensured that London retains its place as the real estate capital of the world.
Our Final Word
The London market received a similar boost earlier this year, as international investment drove considerable growth and expansion. The current surge of overseas investment will also sustain short-term growth, before the market resumes its consistent expansion in 2016 and beyond.
While consistent price growth over the next five years may be good news for home-owners and investors in prime London property, it may however be debilitating for those looking to gain a foothold in the marketplace through resources such as Featherstone Leigh. Much will depend on whether there is a noticeable increase in the supply of available housing in the region, as this will help to create a more balanced market and sustainable growth.