Those currently on the market, searching for a property, or considering their plans to move home in the not-too-distant future, will be seeking clarity on the state of the local property market here in West London. There is caution and to some degree confusion about whether now is a good time to move house.
Our West London Property Market Update | November 2022 addresses the headlines and shares our outlook for the rest of the year.
Addressing the headlines
The frantic levels of activity witnessed throughout 2020 and 2021 have cooled gradually over the course of 2022. The frenzied marketplace many home movers experienced over the past few years has slowed but activity has not stopped; Serious buyers and sellers are active, and transactions are taking place.
The UK’s property market is known for its resilience, inevitably there will be a shift as stability is found in the coming months but there are key factors that support a confident long-term outlook. The latest data* reported that at present over 85% of mortgage balances are on fixed interest rates, meaning the majority of homes have significant protection from higher borrowing costs. Furthermore, roughly one-third of households across the country are unaffected by interest rate rises as they own their homes outright. And at the present time, cash buyers account for about 25% of all transactions.
Whilst there will be a slowdown in price growth, Central London is set to outperform the rest of the country, with continued upward movement in pricing year on year, and predictions forecasting inner London areas will experience cumulative price growth of 19.3% by 2027. Comparatively the UK as a whole is predicted to see 8.9% growth over the same time period.
In his much-anticipated Autumn Statement to the House of Commons on Thursday morning the new Chancellor of the Exchequer, Jeremy Hunt, made various spending cuts and raised certain tax rates. The key takeaway for those planning to buy property is that the ‘permanent’ Stamp Duty Land Tax cut announced by the previous chancellor Kwasi Kwarteng will now be a long holiday instead: “The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until 31st March 2025.”
Mr Kwarteng had raised the lowest threshold at which homebuyers start paying stamp duty from £125,000 to £250,000, giving homebuyers a saving of up to £2,500. First-time buyers receive additional relief. The price a first-time buyer starts to pay stamp duty is set at £425,000, so long as the overall property price is below £625,000; a tax saving of up to £11,250.
Outlook for West London
The run-up to Christmas is traditionally one of the quietest times of the year in terms of transaction levels. It is also known to be a time when those who are serious about moving are active, keen to make the most of opportunities when others have pressed pause.
With Interest rates set to roll back in the coming months, the outlook is more positive for those seeking lending. Furthermore, there continues to be a shortage of property available for sale, particularly here in West London and homes priced sensibly are still achieving good offers and selling.
Pricing is perhaps the most contentious point to consider and over the months ahead we expect to see a certain level of friction between buyers and sellers as market dynamics shift.
We hope our Property Market Update has proven useful to our readers. If you would like to discuss any property matters with us, please do get in touch, without obligation.
*Data from JLL latest report: UK Residential Forecasts.