House prices are usually considerably high in London, but the pandemic appears to have had a considerable impact on house prices in the region for first-time buyers. According to Rightmove, London is the only region where average asking prices for first-time buyer properties have fallen year-on-year, down 1.4 percent compared to a year ago. However, London remains the only region where average asking prices for first-time buyer properties are above £400,000, with the average asking price calculated as £474,950. Express.co.uk spoke to property experts about what the London property market could look like over the next few months.
What are house prices like in London now?
Currently, house prices in London are considerably higher than most other places in the UK.
Pete Mugleston, MD and Mortgage Expert at Online Mortgage Advisor, told Express.co.uk: “London remains the most expensive place to buy a home in the UK, but the capital is the only part of the country that has seen first-time buyer homes become cheaper during the course of the coronavirus pandemic.
“This is especially true around the outskirts of the city where house buyers’ money usually goes further.
“The downturn in prices for this demographic is in sharp contrast to regions like the North West, which has since prices for first-time buyer properties shoot up compared to this time last year.”
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The pandemic has meant people have been working from home for several months, and many may continue to do so for the foreseeable future.
This may have caused a shift in what people are looking for in a home, with many people now looking for larger properties away from the city or considerable outdoor space.
David Westgate, group chief executive at Andrews Property Group, explained to Express.co.uk: “The market for flats in London has struggled since the pandemic struck.
“Outside space became a premium during lockdown and we saw an increase in people moving out of central London to the suburbs and beyond, looking for affordable family homes with gardens.”
Will London house prices drop? When?
Experts told Express.co.uk the London housing market is “uncertain” and it may become clearer whether house prices will rise or drop in the capital when lockdown measures start to ease.
Mr Mugleston added: “The early months of 2021 are among the most uncertain for the London property market and there are a lot of factors in play that could sway house prices in either direction.
“On the one hand, as vaccines take effect and Covid restrictions are eased, buyers could potentially return to the mainstream central London housing market, though on the other, there has been a mass exodus of foreign workers from the capital since the pandemic began and this will likely hit London house prices in the longer term.”
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Whether house prices rise or fall may differ across different areas of the capital.
Estate agents Chestertons predict house prices in Greater London will drop two percent by the end of 2021.
However, the agency predicts Central London prices will stabilise in 2021 and other prime London locations could rise by two percent.
Some property experts told Express.co.uk London prices could rise after lockdown measures ease.
Serg Ivo from SMARTHOST told Express.co.uk: “Forecasting for the next couple of months, the last quarters of 2021 should bring about some rebalancing that hopefully manifests into growth the following year.
“Areas such as Greater London are expected to see a slight growth over the coming months as there are some structural demand changes in place, with more consumers opting to source new properties with greater space.”
Mr Westgate also added: “We should see prices rise slightly if the Government is able to provide a clearer picture when restrictions will be lifted.
“Demand is still there but some buyers are waiting for more clarity on when lockdown will end.
“What I would say to buyers, if you have your finance in place and are ready to purchase, this could be a good time to buy.
“Competition for the best properties on the market won’t be as fierce at the moment as it could be come Spring time if we are out of lockdown.”