For millions of consumers each year, buying a home is a feasible goal that comes with a slew of advantages. Above and beyond having a place to own, purchasing property can lead to wealth over time when done right. However, timing is a consistent challenge among property buyers around the world. This timing issue is considerably more evident in popular metropolitan markets, including London, where individuals have faced some obstacles when investing in property over the last several years.
The State of the Housing Market in London
In the last 12 months, the property market in and around London has been in what some deem turmoil. Falling home prices along with uncertainty surrounding the state of the economy have created some discomfort for prospective buyers and current owners alike. While some nod to major political changes, including Brexit as a driving force behind the so-called turmoil, disruption in the property markets is an ongoing hurdle to overcome.
Comparing housing market data in London for this year and last, prices were down an average of four to five per cent. Property purchases also dropped in number to the lowest amount in over a decade. Despite these recent trends, London’s housing market is set for a bit of a rebound in its current state. This transition may be due in part to the number of homes that experienced falling prices. This telling statistic reached a peak at the end of 2018, indicating a turn in the proverbial tides toward buyers, not sellers. Additionally, housing experts note that the market is on its way to stabilizing, making it a strong time to purchase.
A Buyer’s Market
Despite the disruption in local and global economies, the London property market’s recent stability has created a nod toward buyers this year. Sellers are starting to come down on their asking prices, making purchasing more of a reality for many potential homeowners. Four years ago, the median asking price for a home in London was between 20 and 25 per cent higher than the median selling price of houses; in 2018, that disparity had almost entirely closed.
Additionally, experts at Wetherell, a leader in Mayfair properties for sale, share that a high percentage of buyers feel that now is the time to purchase due to availability of stock, plus the re-aligned expectation levels of vendors. Recent data shows that there is a 50 percent higher property availability compared to years past, and pricing reductions are coming in at 50 per cent as well. The combination of these aspects of both high-end and median housing markets leads to the idea that now is a smart time to invest in property.
When to Purchase
Housing markets, not only in London but around the world, go through seasonal cycles as well as broader economic cycles. Timing to purchase a home is challenging in both areas, but buyers who are ready to take the leap into investing in a property may find that now presents the best opportunity. The trends indicating more stability in the housing market married with a higher level of stock and reduced asking prices paves the way for buyers to benefit. However, the future of the housing market remains murky at best. Shifts in political leadership and a looming economic downturn could ultimately push the property market in London to a less than ideal environment for buyers and sellers alike. Although a lull in property sales may be in the future for prospective London residents, taking the reigns of investing in a home now could be the right move for buyers who are financially prepared.