London residential property forecasts for 2016
What has the property market got in store for London in 2016? To buy or not to buy? We recommend that you read what the local estate agents have to say!
Only London, Paris, Geneva and Singapore are forecast to see stronger price growth (or a slower rate of decline) in 2016 than in 2015. London’s upturn is marginal, from 1% in 2015 to 2% in 2016. Higher transaction costs (a 3% increase in stamp duty for buy-to-let properties and second homes), political risk around the Mayoral election in May, and ongoing affordability concerns explain our muted forecast.
Read full report here: Prime cities forecast report 2016
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Read the full article here: JANUARY 2016
The outlook for the mainstream market is much more dependent on what happens to costs of borrowing. Current indications are that rate rises are still a little way off, which gives more short-term capacity for price growth and increases the prospects of a ripple effect gaining a foothold. However, the stress testing of affordability for mortgaged owner occupiers is likely to prevent a debt-driven housing market boom. Over the medium term, rate rises are likely to put a squeeze on affordability particularly in the capital, making house price growth dependent on earnings and the pace of economic growth both at a national and regional level. This indicates the strongest potential for house price growth in London’s hinterland, feeding further north later in the cycle.
Read the full report here: Spotlight Key Themes in UK Real Estate 2016
Changes in taxation will make little difference at the very highest end of the prime markets in London but do raise a barrier, even for wealthy buyers in prestige areas. Indeed, the better performance of Central London boroughs close to the prime areas can be put down to a shift of demand for property with more capital growth potential.
Higher prices mean the pool of potential buyers is constrained and that’s likely to mean fewer transactions in the short term and slower house price growth too. But a pause in the pace of growth in this sector of the market isn’t a bad thing, allowing the market to adjust to pressures now puts it in better shape for the future.
Read the full report: Autumn 2015 Insight – The Forecast Issue
The first quarter is likely to see a rush of activity in the investment market. With those wanting to invest, avoiding paying the extra 3% stamp duty from April. Thereafter, the market will continue to absorb the changes. With vendors having to accept that purchasers cannot shoulder all of the burden of the above increases and adjusting their expectations accordingly. No market commentators are predicting much, if any, growth in the values of Central London residential property in 2016. Interestingly, none are prepared to say values may fall, but for them to stay at the same level, there needs to be the perfect balance of supply and demand. This rarely, if ever exists.
Read the full article here: LONDON RESIDENTIAL SALES IN 2016
Despite being estate agents with our finger on the pulse of the central London property market, and in particular the vibrant West End, we cannot say for certain whether interest rates will rise in 2016, nor whether London’s economy will continue to boom.
That means it’s impossible for anyone to predict by how much property values will rise or fall but it is safe to say all the time demand for homes in the West End of London outstrips supply, property values will continue to grow over the medium to long term.
Read the full article: How will the West End property market perform in 2016?
London will continue to remain the preferred destination for investments in the property market for the overseas investors. The city continues to offer one of the highest returns on investments anywhere on the globe. As a consequence, in 2016 too, we will see enhanced interest from overseas investors, particularly those from developing Asian nations, in the London property market.
A vibrant economy and better wages in 2016 could help the property market, but are unlikely to make any significant impact in the near-term. The buyer sentiment in London, especially for Londoners at present is not positive and should be tackled at the grassroots level itself. If we do not attempt a paradigm shift to realign the business to meet the growing demand for housing, 2016 is likely to be a repetition of 2015.
Read the full article here: Challenges for housing sector will intensify in 2016
ARLA & NAEA
As house price affordability worsens in the medium term (affordability is discussed in more detail in section 2.3) home ownership will remain out of the reach for many. This effect will be further intensified when interest rates start rising, most likely at some point in 2016.
Read the full report here: Housing 2025