London Homes Became £58000 More Expensive In 2 years
London house prices spiked by £58,000 since the pandemic hit, with an annual growth rate of 7.4% recorded in Q1 2022.
In the first quarter (Q1) of 2022, London property price growth reached 7.4%, the fastest annual growth rate since 2016.
We saw the last record-high annual growth rate of 9.9% in Q2 2016, ahead of the Brexit referendum.
According to Nationwide, an average property value in London reached a new record high of £518,333 in Q1 2022.
These figures mean that an average home in the capital is now more than £58,000 more expensive against 2020 when the pandemic hit. Savvy buyers have several ways to find favourable properties in London, including handy tools like London new houses for sale near me.
As for Outer London (Outer Metropolitan area), property prices spiked even more (11.4%) and reached an average of £422,428.
Nationwide said that poor stock levels of flats and houses and the heated demand in the market after the pandemic drove the spikes in property prices. According to the lender, mortgage approvals reached 71,000 in February 2022, almost 10% up on the pre-pandemic levels.
Industry Experts Comment
One of the specialists at lender Nationwide says that heated property market demand might be driven by a solid labour market. The unemployment rate is going down from already low levels, while salaries are rising.
Another driver for the buoyant market is the significant saving amount that property buyers accumulated over the pandemic. The lender estimates around £190bn of extra deposit savings since the pandemic hit due to the covid-led shifted patterns of spending.
The figures represent around £6,500 of savings per household. However, they were not evenly spread, with older and wealthier households accumulating more than new homebuyers.
An expert at Chesterton confirms spikes in enquiries and sales in March against the same time in 2021. Spring is typically a busy period for the property industry, with more new homes coming into the market. Chesterton expects the trend to continue in 2022, particularly given the heated property demand that makes selling more appealing.
A specialist from mortgage broker Coreco highlights people's desire to switch from renting as the core driver for the heated demand in the property market. Property in London lags behind the regional markets but starts to gather significantly more momentum.
However, other experts point out the heat coming out of the property market. The rising concerns are driven by the increasing interest rates and the costs of living, further fuelled by the geopolitical tension.
The founder of Altura Mortgage Finance confirms seeing more property deals falling through, indicating the rising nervousness among prospective property buyers. People cancel deals without any specific reasons and pull out at late stages of the buying process.
All this and other incidents represent that the property market has passed its confidence peaks. Some people are getting really concerned about rising living costs, interest rates, geopolitical uncertainty, and all-time high property prices.