Anderson Harris was delighted to be quoted on the front page of the Evening Standard this week, discussing the fact that the price of homes in London is increasing at a faster pace than earnings.
London is witnessing growth of a whopping 11.6 per cent per annum, according to the Office for National Statistics (ONS), double the UK average growth rate. London continues to be the real driver of house prices. This is down to its international status, with overseas money coming into London, attracted by a relatively weak sterling. But London is also considered a safe haven with a steady political system at its core.
London is not just about oligarchs parking several millions of pounds in cash here, it is also about families wanting their offspring to attend London schools. The banking sector has also picked up and is providing a fillip to the market. In London, mortgage-seekers need to be able to move quickly to compete in this type of environment.
The regions are becoming more buoyant too. In the south east, there is a growing number of UK-based buyers who have been ousted from the London property market and have to look further afield. This provides a halo effect on prices.
First-time buyers are finding that house prices are rising faster for them than for homeowners who are moving up the ladder. This situation has been partly fuelled by more availability of higher loan-to-value mortgages for first-time buyers, enabling more of them to get onto the property ladder. This is creating greater levels of price competition. As house prices increase, lenders are matching this with higher loan to values. All this might tighten up a bit post 26th April when the Mortgage Market Review is introduced, but that will take a while to filter through to the mortgage market and we might see its effects more towards the end of 2014.
With the latest news on inflation falling in November, this means there is less pressure on a potential interest rate rise. However if you want help in understanding how to move quickly to secure a loan in London, or guidance on which lender is offering the best LTV mortgages to suit your circumstances, please get in touch.