London house prices are starting to ‘show signs of life’ with prices edging upwards in the majority of the capital’s postcodes.
Data from Zoopla’s UK Cities House Price Index for October revealed a 1% increase in London house prices over the last year, meanwhile prices went up nationally by 2%.
When it came to the UK’s 20 cities, prices soared by 2.9% over the past year with places such as Leicester growing by 4.7% but Aberdeen – at the opposite end of the spectrum – seeing prices plunge by 5.9%.
But it was the London bounce on which Zoopla was keen to focus. Indeed, in the capital less than a quarter of postcodes registered negative house price growth over the last month. This is a far cry from the 82% which experienced falls a year ago. Zoopla said today’s figures showed the highest rate of growth for two years.
Realistic prices
The property website attributed this rise, in part, to more realistic pricing of homes. It explained that when the market began to weaken in early 2016 there was a marked difference between the price of new listings coming on for sale and the prices being marked as ‘sold’ on the Zoopla website.
The gap has been steadily closing and this will encourage growth in sales in London in 2020. However, it still expected growth to remain in ‘low single digits’.
Richard Donnell, research and insight director at Zoopla, said: “After a three-year repricing process accompanied by a sizable decline in housing sales, the London housing market is finally showing signs of life.
“The shift in momentum is clear, resulting from a lack of supply, increased sales and more realistic pricing, which bode well for higher sales activity in 2020, rather than a pick-up in house price growth.”
First-time buyers
There were also concerns this growth in London might reduce the opportunities available for first-time buyers, who have been reaping the benefits of the negative price growth in the capital.
Josef Wasinski, co-founder of Wayhome, said: “These figures will cause further frustration for aspiring homeowners struggling to afford the deposit needed for today’s property prices.
“With first time buyers and housing at the forefront of party manifestos, we need to move beyond the rhetoric and be confident that the proposals will become policy alongside alternatives which provide realistic pathways to homeownership for those looking to get on the ladder.”
Regional city slowdown
This could make other cities more attractive to first-time buyers. In fact, while London prices were on the up the other cities were registering growth, but at a slower pace. Zoopla revealed all cities were registering annual growth of less than 5%.
Donnell added: “The announcement of the General Election has brought forward the usual seasonal slowdown, but the last few weeks of the year pre-Christmas tend to be much quieter than after Boxing Day, when consumer interest in housing springs back to life.”
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