property
Property bubble or
hot air?
Parkheath’s managing director Tom Gladwin looks at the recent warnings of a market collapse The recent housing market boom in and around London has prompted media warnings of a property bubble set to burst. But in north-west London at least, the bubble looks unlikely to pop anytime soon. At Parkheath, we have seen price rises of almost eight per cent in the first quarter of 2014, which is a huge increase over such a small period of time. We have also seen a 20 per cent increase in the number of sales. And yet buyers continue to outnumber new properties coming to market: every property sold seems to set a new record price as competition amongst buyers soars. The alarming headlines and cautionary tales of bubbles and boom and bust are based on the sales statistics of prime areas of London and small, desirable pockets around the country. Bank of England bosses have urged potential buyers and sellers to take caution and have warned of measures to combat the rising market. It is, however, unlikely that any measures which are taken will curb house price growth in prime north-west London. If interest rates were to go up, some landlords and homeowners may be forced to sell, yet these additional properties coming to the market would only partially satisfy the current demand having little or no affect on boom areas. However, any premature rising of rates would kill off the green shoots of recovery in less stable areas of the UK. Businesses would stop investing, home owners would have less money and stop spending, retailers would make fewer sales and the outlook would be bleak again: something I doubt the government would be pleased to see with an election due within a year. Whilst a rise in stamp duty may slow the middle market in London, it would do little to halt record sales such as Britain’s most expensive apartment which recently sold for £160 million, and any further increase in property taxation is likely to congest the market further. Homeowners looking at moving up the property ladder are likely to be deterred from doing so if stamp duty rises. This would further decrease stock levels and consequently drive prices even higher. Let’s hope the rise in house prices is not as fragile as some commentators suggest, but more a sign of a resilient and stable period of growth reflecting London’s continued rise to the top of the league of the world’s best cities. n
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Parkheath is... Sold On Kentish Town Parkheath has also been very busy opening the latest addition to our network. Our new office in the heart of Kentish Town opened its doors in May and is already inundated with lettings and sales in and around the area. Our Kentish Town team is passionate about the local area and is determined to bring new levels of professionalism and service to this vibrant and highly desirable location. Also, look out for our latest star employee: our office dog, Dolly, is now featuring in Parkheath’s advertising campaigns across London! 148 Kentish Town Road, NW1 020 7485 0400