London defies doomsters with house price surge

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The resilience of the London property market has defied detractors for decades

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Could the latest surprising property market figures from the Land Registry be a matter of celebration… or alarm?

It hardly seems credible that prices moved close to double-digit rates, at a time when interest rates are rising at every meeting of the Monetary Policy Committee.

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There can be many reasons why this is happening. The first “move on with our lives” effect is far from played out. After six years of Brexit uncertainty and pandemic lockdown, there are plenty of Londoners who need or want to relocate for all the usual reasons of death, divorce, children and sheer aspiration.

Second, the rise in interest rates has actually made many decisions to climb or move up the ladder while borrowers can still lock in cheaper rates.

Third, a sharp decline in the value of the pound means that the capital is still very attractive to foreign investors. Prices at the top addresses in prime central London are still about 15% below where they stood before the 2014 stamp duty changes.

It seems, if not inevitable, that this latest surge will run out of steam in the winter as lending rates remain high. But the resilience of the property market – particularly in London – has defied forecasts of doom for decades.

There has been no steady deep fall in prices across London since the early nineties. All blips since then have been relatively short-lived. Good news for owners, but younger Londoners looking to root through property purchases will feel more closed off than ever.


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