All the major house price indices agree on two main things: firstly, London has stalled after the stupendous price growth of recent years, and secondly, the sheer lack of supply means prices can only fall so far.
Cooldown in the capital
According to the ONS HPI published in mid-November, London values have grown by just 2.5% over the past year, compared to 5.4% for the UK as a whole. By contrast, the North West of England has seen the strongest price growth, registering 7.3% growth over the year.
Somewhere in between you have the South West, showing growth of 6.6% over the past 12 months, the East Midlands, 6.4% and the North East 4.4%. Compared to these regions, London is stuck in first gear, and has been for quite some time. It’s hard to see things improving in the capital next year, either. Slow and steady is as exciting as it’s likely to get.
Weak supply saves the day
The supply problem is more fundamental, of course, than the fact that people are not putting their homes up for sale (in many cases because they know it’s a buyer’s market and they may not get what they want). It’s also being driven by the fact we are building too few houses in general - a narrative that has gone on for as many years as it looks set to continue.
No boom, but no bust, either
The property market might not be booming, but the sheer lack of bricks and mortar up for sale and being built, and the structural lack of space in which to build homes, means it’s highly unlikely to go bust, either. In that regard the immortal words of Mark Twain still ring true: “Buy land, they’re not making it any more.”