Shortage Of New Homes Pushes London Property Prices Higher reports Estate Agents London

(EstateNewsWire.com, November 10, 2012 ) London, U.K- Already home to the UK’s most expensive residential property, London’s market for homes shows no signs of cooling down. Despite a and a slack economy and a recent slowdown in the most recent quarter, in which London housing prices rose only 3.5%, down from 3.7% in Q2 2012, experts are forecasting a continuing long-term climb in property prices and rental values. Contributing to their confidence are an accelerating population growth in the nation’s capital and a shortage of new housing construction.

According to government projections, London will see an increase of 34,000 to 38,000 net new households each year until 2028. If new home construction remains at the pace it has seen during the last decade, only about 21,000 new homes will be built each year to accommodate would-be renters and homebuyers.

Price growth is fastest and steadiest for upper-end properties in the most sought-after areas. During the past year, homes in London worth £1 million or more recorded an 8% increase in their share of all residential properties in the city, climbing from 34.6% of total properties to 43%.

Once found mainly in such traditional prime areas of central London, like Kensington and Chelsea, £1 million properties are increasingly found in neighborhoods to the south or west of those areas. The head of one property agency notes properties “no longer have to be palatial to be worth £1 million If they are located in a popular prime area.”

Price increases are also quickening for upper-end properties. In the last quarter their average price rose at a pace equal to an 11.1% annual rate. London housing prices overall grew at a slower rate, 2.1%, during the quarter, although the capital saw larger price increases than did the rest of the country.

The most recent data for prime central London housing, from a monthly sales index maintained since 1976 by the Knight Frank realty firm, showed a 0.8% increase in October, continuing a series of increases dating back to November 2010. The index reading is now 52% above its low point in March 2009, after the financial crisis. The monthly gain outpaced October’s 0.6% gain for nationwide housing prices, held down by above-normal unemployment levels and lagging take-home pay.

Rising home prices may be creating millionaires among homeowners and bringing property owners higher rents, but they may also be shutting would-be homebuyers out of the market, especially since mortgage lenders impose strict standards. Nearly two-thirds of households in inner London are renters, as are 40% of households in outer sections of the city.

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Estate Agents London

Benjamin Wrights

4157669098

news@postpressrelease.com

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