Samir Salya on Elements Influencing London Property in 2018

Moving on from the turbulent year of 2017, London’s property market looks set to move towards more stability and success. Though still trailing behind the UK’s upturn, recent changes have allowed more flexibility to the market. There are several factors that could help boost sales in the capital this year.

Low-interest rates

The interest rate across Britain is helping to rejuvenate a flagging market post-Brexit. As the economy in Britain remains weak, it is unlikely that the region will experience any major hikes in interest rate in the coming year. A slight increase of 0.25% is expected around late spring, which will increase the Bank of England’s base rate to 0.75%.

Outpricing residents 

While low-interest rates could help the burden of buying, this does little to assist with inflation outpacing wage rises. According to statistics released by property market analytics, Hometrack, the average price in London are now 14.5 times the earnings of an average Londoner.

This has led to stagnation in the property market, bringing an end to the runaway growth of recent year. Building society Nationwide reports that London is at the bottom of the regional growth table for the UK for the first time since 2004. This decrease in activity can be attributed to mortgage affordability, political uncertainty, and tax changes all affecting buyers.

Likely, this will lead to greater foreign investment into the city, with people looking to take advantage of the weaker pound.

Possible relief for tenants

After years of increases, rent prices fell in London. The National Rent Review noted that rents have fallen in 26 of the 33 London boroughs, with the city seeing a fall of 0.83%. With this, the London is witnessing a rise in renters, resulting in a decrease of first-time buyers in the region. Landlords continue to dominate the London property market, but there is some respite for renters as costs being to decrease at last.

Higher buildings

London is set to see an increase in tall skyscrapers. With One Nine Elms seeing construction in 2018, the 56 storeys are set to dominate the London skyline. First-time buyers are expected to move in by 2019, with starting costs for apartments standing at £900,000.

Likewise, the Spire in Docklands will see its 67 storeys completed in 2020. With many of its 861 suites having prices of over £2 million, wealthy investors into London’s property are set to rise.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.