Hindsight is a wonderful thing.
From the Wall Street Crash in 1929 to ‘Tuliamania’ during the Dutch Golden Age, history is peppered with events that recall how a commodity reached extraordinarily high levels and then dramatically collapsed. So it would be somewhat safe to assume that something similar could happen to the UK property market, yes?
To a degree, London properties loosely meet the above assumption. At the apex of the housing market, this is somewhat accurate; Foreign buyers will purchase a property, watch its stock rise, and then sell it for a profit however many years later, whilst not even renting or moving into the property and viewing it purely as a financial investment. If you’re interested in finding out more about this, check out last weeks blog.
However, as we go further out of London, this assumption becomes much less stable, particularly when it’s placed in the context of the current market. With the capital becoming more and more crowded, seeking space to build new developments is getting harder, despite the government releasing public land as quickly as possible. The population of London is also steadily rising quicker than anywhere else in the country, and the bubble is set to only get bigger according to the latest calculations from the Office for National Statistics.
It’s this stressful demand that will keep property prices in check. Although their initial boom seems to have long gone off , the dust has settled now and the prices in central, generally speaking, have not being growing at the same rate as other areas outside the M25, most likely due to the steadily rising cost of living in London.
Featured image credit: londonpropertyanalyst.co.uk