Growth in London's property market has been the subject of much hubbub in recent times and it is starting to feel like the city's skyrocketing prices have no end. However, it seems the capital could be about to reach something of a plateau. According to British estate agent Foxtons, there is unlikely to be a significant rise in transactions in the future. The organisation explained in its third quarter financial results that while it is confident about its prospects for the rest of the year, it doesn't expect a surge in sales in London.
This stagnation may come as no surprise to some, after Rightmove recorded a 10.2 per cent rise in asking prices in the capital during October - growth that it claimed was "unsustainable". However, this increase actually came after falls of 2.8 per cent and 1.5 per cent in August and September respectively. Of course, a levelling out of growth will be pleasing to the London market, which is in need of something of a cooldown. This is particularly the case for the inner city, with more central boroughs experiencing considerable growth.
In October the City of Westminster saw 11.9 per cent house price growth, making it the top performer during the month. Not far behind were Kensington and Chelsea, and Hammersmith and Fulham with 11.8 per cent increases respectively. Across London, values are now 5.6 per cent higher than July's record price of GBP 515,379. The year-on-year increase in the capital is now 13.8 per cent.
These figures are understandably fuelling fears of a bubble. Doug Shephard, director at Home.co.uk, commented: "London's housing bubble has come about through ever greater sums of cash chasing ever fewer properties over the last five years. Soaring prices may well be welcome news for homeowners who see their equity growing, but, on the flip side, they are highly troubling for potential buyers and create severe downside risk. The growth curve in prices over the last 12 months alone appears unsustainable, and the market metrics are not showing any signs of a slowdown in price growth."
Not sure what to make of the statistical house price confusion? Learn more about the impact of average house prices
- Friday 08 November 2013