Prices in the capital have soared by 10.3% in the last 12 months and are predicted to increase still further by between 5% and 7% in 2014; though most of this growth will occur in the first six months.
That’s the prediction from estate agent Marsh & Parsons who say that London property prices will rise faster than the rest of the UK.
However, they also point out that the rate of growth will stabilise and the continued lack of housing supply will help fuel property price increases.
London house price prediction for 2014
Peter Rollings, the firm’s chief executive, said: “We expect a strong start for annual price rises in London next year after the housing market saw a substantial growth this year. However, the rate of growth will not be as spectacular as it was last year but with ongoing support from government initiatives the growth in property prices will remain sustainable.”
The estate agency is also predicting a ‘modest’ increase for interest rates in 2014 and increasing employment which will have an impact on the property sector.
But with a General Election scheduled for 2015, Marsh & Parsons says there will not be any unexpected shockwaves for the housing market before then.
To underline the lack of property for potential buyers, the estate agency reveals that there are currently 18 buyers registered with them for every available potential buyer. That compares to 13.5 registered buyers at the end of 2012.
The current high ratio is expected to be the same in 2014.
People reluctant to sell their homes
Mr Rollings added that another reason people are reluctant to put their property on the market is that they aren’t confident of finding somewhere else to move to which means that the supply of properties to be sold is not likely to improve next year.
This means there is good news for those who do decide to sell, said Mr Rollings, since most properties are selling for close to, or at, the seller’s asking price.
In central London, the agency is finding that in 98% of sales, the asking price is being met.
There’s also good news for landlords with Mr Rollings predicting that rents in prime London locations will ‘hold steady’ next year and there could be rises of between 2% and 4% rather than the static levels being experienced this year.
The most lucrative sector for rental properties in London will be for two bed homes in central areas, such as Kensington, with demand being fuelled by big City firms who are experiencing strong growth again.
The consequence of this demand will see landlords experiencing fewer, if any, void periods while tenants will have to face strong competition for the best properties available.
