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Buy a house next year... then sell it in 2015
05.11.09
The “ideal” time to buy a London home and cash in on price rises is the end of next year, housing economists said today.
Property prices in the capital are on track to fall 4.1 per cent again next year, wiping out this year's recovery from January's low.
But from 2011 they are expected to soar for the following five years by 31 per cent, researchers at estate agent Savills predicted.
In the City bonuses and foreign investor-driven “prime” central London market, involving top quality properties in Kensington, Chelsea and Notting Hill, the predicted uplift is even more
dramatic. Lucian Cook, director of research at estate agent and surveyors Savills, expects prime values to fall by only one per cent next year — then rise dramatically by almost 43 per cent over the subsequent five years.
This extended “w” recovery relies on the economy and employment growing by 2013 and mortgages becoming easier to obtain.
House prices in London fell by an average of 15.1 per cent last year, but by Christmas they are expected to have recovered by six per cent. The turnaround was thanks to the return to the market of equity-rich buyers who needed to move or cash-rich investors who wanted to take advantage of cheap borrowing rates. They chased the limited properties for sale, pushing up prices.
Mr Cook warned such rises were “unsustainable” as pent-up demand from such buyers will dry up. He said: “Events on the horizon are likely to put a brake on mainstream house prices in London in the short term.
“The uncertainty preceding the general election, the prospect of higher taxes, further unemployment, public spending cuts, and continuing mortgage rationing will all have an impact. Pent-up demand from needs-based and cash-rich buyers which is driving the market is likely to be used up next year.
“That will leave a buyer void. At the same time competition in the market could be reduced by an easing of the property supply as this year's price rises encourage people to put their homes up for sale.” He said the prime market was less likely to see price falls as it was driven by bankers' bonuses, which seem to have returned to boom-time levels, and foreign investors.
Reader views (1)
What a surprise - estate agents talking up the market! Savills are the enemy of the people and this "forecast" from "economists" is probably built on spinning the bottle, dust, a random number generating monkey and exotic blue cheese.
- Baz From Peckham, Peckham, London
