London House Price Forecast: 20% growth predicted
Despite the recent Coronavirus pandemic and its subsequent effects, the UK property market is on a track record for growth. Since the market re-opened in March, it’s had a bumper-year with property prices increasing across the UK. Though there have been fears that this may come to a halt when the Stamp Duty Holiday and Furlough Scheme end in March 2021, a London House Price Forecast of 20% has boosted confidence in the capital.
October Growth
In October, UK house prices rose at the fastest annual rate in more than four years. Figures released by Halifax show that prices were up 7.5% compared with a year earlier. Though the largest growth has been for detached properties, the average cost of a flat has increased by 2%, since March. This demonstrates city-centre living is still firmly on the agenda for many Britons.
Will the growth last?
There have been some concerns that growth may slow when the Government’s Stamp Duty Holiday comes to a close in March 20201. However, Exclusive New Figures by JLL predict a 20% growth in London Property Prices towards 2025.
The figures predict that an increasing housing supply shortage combined with a rise in suburbanisation mean London will lead the UK housing market in the post-pandemic recovery. Property prices in the capital are expected to rise by 21% over the next five years. This London House Price Forecast is good news to those looking to invest in the capital.
Prime Property to lead Recovery
The post-coronavirus recovery is expected to start in prime, central London. Overseas Investors are already returning to London’s Exclusive districts like Mayfair and Kensington.
The Central London Property Market performs differently to the rest of the country. Driven by high-net-worth individuals, the area performs well out of a downturn – bouncing back quickly. When the central London property market does well, wealth generation ripples out to the rest of London, boosting property prices.
Housing shortage to Boost Prices
Pre-pandemic, the UK already had a housing shortage with a lack of supply blamed for high prices. Despite plans to increase the number of homes, housebuilders in London have fallen behind during the coronavirus pandemic. As demand continues to outstrip supply, the housing shortage will boost prices, particularly in high-demand neighbourhoods.
Should I buy Now?
Back in July 2020, the Government announced a stamp duty holiday. This means that until the 31st March 2021, those buying a property in England and Northern Ireland stand to make substantial savings. While the average stamp duty bill for an investor in England is predicted to fall by £1,840 (22%), in London it’s £7,240 (26%).
Instead of stamp duty kicking in at £125,000, it will apply at £500,000. For those buying properties worth £500,000 or more, this means a saving of £15, 000. With the average price for property in London standing at £666,842, this is good to those looking to invest.
A London House Price Forecast of 21% by 2025 is good news for those looking to invest in the capital’s property market. Whether you are looking to buy a new home, purchase a buy-to-let or sell your exiting London property, contact Hastings International. We are specialists in the London property market and can help make your property journey as simple as possible.
