What can we expect from London house prices 2020?
Central London in particular took a large hit after the Brexit result, with asking prices dropping by as much as seven per cent in 'luxury' areas since 2016. The prolonged negotiations of the Brexit deal(s), and the possibility of a disorderly, no-deal Brexit appeared to threaten the housing market further, with property experts predicting further London house price falls of as much as 20 per cent.
However, this sharp fall now seems unlikely. Last week, we reported that prospective home owners across the country should prepare for the possibility of a sharp rise in house prices, which is especially important to bear in mind for those who are about to take out a mortgage.
It now appears that if you are planning on buying in London, you should ideally make a move within the next year at most. House price predictions by Savills indicate that all of the London areas will see substantial price growth in the next five years, with prime London locations such as Mayfair and Knightsbridge seeing a 20 per cent value increase by 2024.
Other London areas, it's predicted, will become 11 per cent more expensive by the end of the five-year period, and the commuting suburbs even more so, increasing by 13 per cent. The rises in house prices across London will be driven at least in part by the lack of supply of newly listed properties.
Having said that, it's unlikely we'll see these sharp increases in the capital in 2020 itself; the recovery will be slow, and the London market could still be hampered by further hiccups in the Brexit negotiations. Even the prime London areas will see a modest increase of 3 per cent next year, while the London suburbs should see static house prices with no statistically meaningful increase from this year. It is likely that the more expensive central London areas will see a return of foreign investment, which had slowed somewhat both because of Brexit and the slowing down of international luxury markets overall.
What does all of this mean for prospective home buyers in London? You have a few more crucial months to find a London property, but you should try and complete the purchase and sort out the mortgage by autumn 2020. There also is still a possibility of interest rate increases after 2020, which would make the mortgage more expensive. More reason not to wait too long if you are in a position to buy now.