UK house prices are continuing to fall with few if any signs of the market improving. Hometrack has advised that the average cost of a home was down by over 2% over the previous year. Demand remains weak with mortgages difficult to obtain. The likelihood is that prices will be even lower next year and it will be some time before the situation improves.
The good news for most overseas buyers is that agents will tell you that London is a very different market to the rest of the UK. To some extent this is true. The zone 1 and 2 central London market is being propped up by overseas buyers who are not experiencing the same difficulties in securing mortgages as their UK based counterparts are. Nevertheless, in many people’s opinion the London market cannot indefinitely avoid what is happening with the UK economy. In their opinion it is inevitable that given the severity of the problems the UK is going through this market will be affected.
As we have commented before, reputable parties disagree with the above view and are much more bullish about prospects for the central London market. However, it is worth noting there are rumors of falling sales rates at exhibitions in Hong Kong over the last couple of months. No-one wants to admit the Hong Kong buyer is losing his appetite for London apartments and it is fair to say some buyer fatigue was inevitable after the flurry of sales in the first half of the year. Given that demand from Asian buyers, principally in Hong Kong and Singapore, will be soft now until after Chinese New Year the real test will come in February/March when the London agents return in force and the exhibition circuit starts again. What happens at the exhibitions may have a profound bearing on what happens to the market next year. We will keep you posted.
