*** STOP PRESS *** As I write we have just agreed our fi rst sale of 2019 which was a “best and fi nal offers” scenario with seven offers received. Market outlook 2019 So the regular professional pundits are predicting anything from a 5% price fall through to 4% price growth for the London housing market in 2019. My thoughts are that with such low transactional volumes there will be a large variance between property types within any given geography around London and therefore for it to make any meaningful sense you need to break the market down further into both individual property types and a hierarchy of locations within each area. For example, well presented quality family homes in prime l ocations in Chiswick may well see a year on year increase in price due to a scarcity value. Owners of these properties tend not to sell in a depressed market and they defer until market conditions improve. At the other end of the spec trum “unloved” rental properties being sold by investor landlords may see a fall in value year on year as demand for this type of property is at a 20 year low. Specifically, investors and overseas buyers have been scared off by tax changes leaving only owner occupiers to take up the slack. Unfortunately many owner occupiers do not want to live long term in rental properties as the majority of rental properties are too small, lack storage space, and are often in secondary and tertiary locations. Properties that have the ability to extend and/or improve will also fair well throughout 2019 as they allow the purchaser to “add value” which can be offset against the signifi cant cost of stamp duty thus giving a buyer the confi dence required to proceed. Low interest rates mean servicing mortgage debt is affordable and there is no incentive to leave capital in the bank so many would be sellers have the ability to postpone selling until they can achieve a greater sale price. It appears homeowners do not think that prices are going to fall dramatically in the short term as there is no evidence of any panic selling and so we conclude that supply will be very low in the early part of 2019 combined with steadily improving demand throughout 2019 leading to a rather unimpressive market with neutral effect on price. Market sentiment was apparent at a recent drinks party I attended where independently three out of fifteen households questioned me on the financial impact of doing basement conversions. Looks like it could be another bumper year for the local builder!
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