London house prices have fallen at the fastest rate in ten years according to new figures released by Nationwide. Prices across London properties fell by 3.8% in the previous year, with properties around £18,000 cheaper now. Estate agents now believe that house market activity is picking up as it becomes more affordable for first-time buyers.
There have been encouraging signs for first-time buyers actively growing in the housing market due to a number of factors. Increasing wage growth, high employment levels in and around London and historically low mortgage rates and approval for home purchases have helped maintain house market activity across the capital.
“It was almost inevitable that the uncertainty of Brexit would drag property prices down, especially as the date gets close and many buyers take a ‘wait-and-see approach’,” explains Guy Gittens, managing director of estate agent Chestertons.
“However, we have experienced an incredibly busy start to the year, with a sharp increase in buyer registrations, viewings and offers, which reflects pent-up demand and suggest that prices are now at a level that buyers are comfortable buying.”
Government schemes such as Help to Buy have encouraged first-time buyers to get onto the property market. As potential property owners continue to take advantage of falling London house prices, it’s becoming increasingly important for property developers to design and build the right type of development to take advantage of this growing market.
Due to London house prices stagnating and falling in areas, rising wages have helped improved the affordability of being able to purchase a home. In fact, recent studies show that the average deposit saving time has fallen amongst younger people. Read more here.
Property development remains a highly profitable venture that, when done correctly, can be incredibly lucrative. As first-time buyers begin to grow into the property market, it’s increasingly important that the right type of property is available to supply the demand for this particular market.
Smaller property developments that involve flats and terraced houses are far more likely to receive offers rather than larger, detached homes that are frequently priced-out of budgets for first-time buyers.
Government measures are being put in place to help reach a target of 300,000 new homes built a year by the mid-2020s. By focusing on developments that maximise the potential of land in and around the capital, property developers are beginning to flourish in this particular area within the property market.
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggest that sentiment has softened,” Robert Gardner, of Nationwide, explains.
“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”
There are a number of factors that can affect property value for properties in London and for the rest of the south-east. These factors have to be considered before any property development is undertaken. You can find out more about the steps to property development by reading our in-depth guide here.
If you have any further questions or queries about property development or property development finance, get in touch with us today on 01825 749721. You can also get in touch by filling out an online form in which we’ll get back to you as soon as possible.
Hunter Finance offers fast and flexible finance to property developers all over Essex.
We lend to a wide range of people, including:
60% of the commercial value of the properties on completion plus 100% of the build costs. You can borrow between £100,000 and £2.5m.
If you would like to find out more about our property loans for your project, please call 01825 749721.