More clear signs that the London Residential market is recovering well ahead of the rest of the UK (as has traditionally been the case):
“So many surprising things have happened over the past couple of years that it is encouraging to see something reverting to type. The norm is for the housing market in London to lead the rest of the country, and that is what seems to be happening.
The latest survey from the Royal Institution of Chartered Surveyors (Rics) reveals increased activity, with prices starting to stabilise — and the capital is showing the way. On an unadjusted basis, a balance of only 5% of surveyors in London saw prices down last month, against 89% in December. Looking forward, more of them in the capital expect prices to rise than fall in the next three months.
Nationally, the balance of surveyors reporting a fall in prices has dropped from 84% to 36% (74% to 44%, seasonally adjusted) since December. At the other extreme, a net 82% of surveyors in the West Midlands say prices are falling; in Yorkshire & Humberside, it is 69%.
David Adams, head of residential at Chesterton Humberts, thinks London prices probably bottomed out last month, but that the rest of the country will not stabilise until November. This would be consistent with the ripple effect of previous cycles.
Yet this cycle, we were told, would be different. With the City and Canary Wharf hit hard, and bonuses in short supply, some feared the London market would be hit hardest. At the top end, though, the loss of bonuses has been compensated for by overseas buyers — especially Europeans taking advantage of the weak pound. Italians, in particular, seem to have decided that this is the time to buy a luxury flat in London.
Lower down the scale, estate agents quoted by Rics talk of returning confidence, limited supply and a perception that the worst is over. Even for those working in financial services, recent months have seen a shift in mood. Last autumn, they thought their world was coming to an end. Even in January and February, they weren’t sure. Now they are optimistic, and the concern among agents is that prices will bounce back too quickly, threatening the sustainability of the recovery.
Such thoughts are a long way off for many parts of the country. They have to hope that, as in the past, where London leads, they will follow.
– As many as one in 10 homeowners are caught in negative equity, the Bank of England reports. It says the scale of the problem is similar to that of the early 1990s, but it has emerged more quickly, because of the sharpness of the fall in house prices from their peak in mid-2007 to the first quarter of this year. Thanks to low interest rates, however, the level of mortgage arrears and repossessions has, so far, been far lower than last time around.
– Confidence appears to be coming back to the market for farmland after nine months of falls, with prices now beginning to edge above £5,000 an acre and, in some case, reaching £6,000, according to research by agents Knight Frank. Sentiment is being boosted by the return of investors, who had helped drive prices above £7,000 an acre at their peak. Future growth is expected to be steady rather than spectacular.”
http://property.timesonline.co.uk/tol/life_and_style/property/article6487270.ece (David Smith, The Sunday Times).