By Laura McGuire
London house price growth will continue to “underperform” in comparison to the rest of the UK, property experts have predicted.
Tom Bill, head of UK residential research at Knight Frank, said that buyers “struggling with affordability” will hinder recovery in the capital’s property market.
“People were leaving to get more value during the pandemic..and I think that’s still going to continue because of how far house prices in London pulled away from the rest of the country over the last 10 to 15 years.
“There’s a fairly large historical gap that’s opened up and the gap is closing very slowly,” he explained.
In December, the price of a house in the capital cost £528k but costs declined by -2.3 per cent on an annual basis.
Bill said it is likely that more affordable parts of the capital, such as South East London, will see stronger house price growth this year.
“I think those sorts of areas are going to perform more strongly,” he said.
House prices in more affluent areas in central London are however expected to lay flat, due to the suspected general election this year.
He said: “The risks are bigger around the election for higher value markets given what some of the proposals are around stamp duty and VAT on school fees for people at the higher end of the housing market.”
As mortgage approvals continue to rise, many would-be buyers are hoping 2024 could be the year they finally get on the housing market.
This morning , the chairman of NatWest said, “It is not that difficult” to get on the property ladder in the UK.
Asked by BBC Radio 4’s Today programme when it would be easier for people in the UK to get on the property ladder, Sir Howard Davies, chair of NatWest, said: “I don’t think it is that difficult at the moment.”
“You have to save and that is the way it always used to be,” he explained.
Sir Howard added: “What we saw in the financial crisis was the risk of having people being able to borrow 100 per cent in order to get onto the property ladder, and then suffering severe falls in the equity value of their houses, and having to leave and having a bad credit record. So, there were dangers in very easy access to mortgage credit.
“So, I totally recognise that there are people who are finding it very difficult to start the process, they will have to save more, but that is, I think, inherent in the change in the financial system as a result of the mistakes that were made in the last global financial crisis.”
