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Evening Standard Nationwide HPI

ended 30. August 2023

Newspage now has a partnership with the Evening Standard where we give them exclusive content on breaking stories. Ahead of the Nationwide house price index, which will be published on Thursday morning, a few Qs:

  • What are the key trends you are seeing in the London property market right now?
  • Are homeowners leveraged up to the hilt with giant mortgages going to be forced to sell, putting downward pressure on prices?
  • Are landlords selling up because the numbers no longer stack up in the capital?
  • Are there still opportunities for investors in London?
  • Are overseas investors piling into London real estate? If so, from which countries?

Any other trends you're seeing in the London property market that you think need to be covered in the Evening Standard, let us know.

6 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
You have more chance of finding Nadine Dorris in mid-Beds than a buyer for your house in the capital in today's market. The property sector continues to falter as rate rises suck all of the confidence out of the market. Sellers are having to slash their prices, and those that don't are hanging around on property portals like rotting meat in the desert. The only way this will turn around is when Andrew Bailey removes his head from the sand and starts reversing his disastrous policy of rate rises. The likelihood of that in 2023 is where rates used to be, near zero, so expect a crash of a further 10% in London this year as the capital is hit harder than most other regions due to the higher prices and stretched affordability.
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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Landlords are struggling to make the margins work across the UK but this is further exasperated in the capital with the highly inflated property prices and the large mortgages on them pushing payments higher than the rental market can realistically go. If your mortgage goes up and your current tenant is still tied in for a while on their current rent, you can quickly amount large losses.

There will have to be a London housing price adjustment soon, as when properties are not affordable to those who wish to live in them, and the figures do not make them good investment buys either, lack of demand will force prices down.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
The London property market is currently at a critical juncture, with experts warning of a potential crash that could result in a 20% drop in property values if mortgage rates remain high. Despite 14 interest rate increases by the Bank of England's Monetary Policy Committee, property prices in the capital have only fallen by a relatively modest 2.6% in the last 6 months, indicating a degree of resilience. One major concern is the nearly one million fixed-rate mortgages, including around 100,000 in London, that need refinancing before the end of the year. Homeowners will face substantial increases in repayments at a time when the cost of living crisis is already straining budgets. Despite the uncertainties and potential price declines, we see opportunities in the London property market. We are very optimistic about the market over the next year. We see the current market as a clear buying opportunity for the value-driven investor, given the acute housing supply shortages.
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Clive Read
Owner at Goldmanread
We have seen the market in London becoming much quieter in August with a continuing stand off between cautious buyers and sellers who refuse to budge on price. Borrowers seem fairly sensible with those who are able using bonuses and other excess income to pay down debt, this is particularly common amongst our High Net Worth clients. Where we have seen big changes is in the number of landlords looking to exit the market as buy to let just doesn't stack up anymore. Rightmove now has many 1 & 2 bedroom flats for sale across its London postcodes, though the demand for these properties remains sluggish. As always there is a shortage of decent 3-4 bedroom family houses across London and this is one area investors should be able to gain in. Anecdotally we hear of overseas investors moving to the London market but many of these are cash purchasers and therefore tend to be under the radar as far as mortgage brokers are concerned.
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Imran Khan
Co-founder & CEO at QuantumLoopAI
London rents are climbing unprecedentedly high while rental property supply is low. 2023 will be one of the toughest years for rental supply. Variable interest rate homeowners feel the pressure, resulting in an increase in property listings.

Despite the challenging rental market, there are select London areas where well-priced properties are still seeing transactions while the buy-to-let market's prospects are currently dwindling due to the withdrawal of Far East investment, leading to saturation in the supply of new builds. Yield and capital appreciation prospects are diminished, and landlords find higher taxes and strict compliance measures challenging.

As mortgage arrears increase, it could be a hint of market shifts late in 2023 and into 2024. Policymakers' strategies are currently counterproductive, worsening the already high rents and pushing landlords out. Leaders must offer actionable solutions to address the challenges and ensure a sustainable, balanced housing market.
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Ashley Thomas
Director at Magni Finance
The reality is that unless you have a low loan to value, owning a BTL in London won’t be feasible. Landlords with large portfolios or significant wealth will be able to sustain their properties.

However, small landlords with one or two properties will probably sell. Regardless, the cost will be passed to tenants somewhat as landlords will have to increase the rent.