The latest data revealed, after increasing steadily for eight months, the average London house price has fallen by 1 per cent to £247,703 from £250,137 in May. House prices have increased by 9 per cent since this time last year from £225,805. Activity levels have also dropped by 4 per cent from last month, however haart expects activity levels to bounce back and rise well above average summer months.
The drop in house prices in the capital this month brings the average price back below the quarter of a million mark which it hit in May. The drop is a result of sellers ensuring they secure a sale as buyers remain price sensitive and overpriced properties are not selling.
Paul Smith, chief executive of haart estate agents, commented: “Alongside the fall in prices this month, activity levels are also slightly down. It is likely that these reduced levels of activity are partially due to a preoccupation with the World Cup which has resulted in people putting aside important decision-making until the tournament is over. However, we are expecting activity to bounce back again over the course of July to an unusually buoyant market in the summer as activity resumes after the World Cup. We could in fact see a 10 per cent increase in transactions.
“The housing market has had a very strong start to the year. Buyers have been a lot more confident and returned to the market, as a result sale transaction levels are up by over 36 per cent from this time last year. However, amidst speculation that interest rates will go up shortly whilst property prices crept up in the first half of the year, activity levels have dropped back, as the market stabilises. We expect house prices to continue to level off and for there to be an increase of 6 per cent at the end of the year.”
First-time buyer levels have dropped by 1 per cent to 26 per cent of the market share this month, coming down from a peak of 28 per cent in March. However, as house prices level out in the second half of the year, the number of first-time buyers is likely to rise again.
Variations in property price growth across the different areas of the capital shows a north / south divide, with the south-west and the south-east seeing the greatest increases in value at 4.6 per cent and 4.2 per cent respectively and the north and north–east seeing the greatest drop in property prices. The property prices in the south-west and south-east have been boosted by the increased demand due to the good schools in the area and the shortage of stock.
