December 2010 saw UK average house prices falling by 0.2% on the previous month for the fourth month in a row. By contrast, London property prices rose by 1% and were up 6.2% up overall on December 2009. In some areas, property prices had risen by more than 10% and the market is now suffering an acute shortage of supply. Some estate agents claim there is now a ratio of five buyers to every one available property within the capital.
The London housing market remains at odds with property trends elsewhere in the country for both sales and renting. The Land Registry reported the average price in the capital currently stands at £342,325, compared to £163,814 elsewhere.Property experts attribute strong demand to renewed interest from overseas buyers and a perception among executives worldwide that London remains one of the most prestigious and safe places to live and work. For those looking to buy however, deposits have still not returned to the lower levels seen before the recession. Coupled with an acute shortage of available homes for sale, London's rental market is experiencing robust tenant demand and rising rents.
These figures coincide with a tangible improvement in the availability of buy-to-let mortgages reported by the Council of Mortgage Lenders (CML). The CML report a rise of 7% value in the fourth quarter of last year compared to the third; 28,600 new loans were approved for buy-to-let properties, with an estimated value of £3 billion.
In December of last year, media reports began to surface of an acute imbalance of supply and demand concerning lettings. Potential renters were reported to be encountering similar levels of competition for London homes as those found within the sales market, although this could simply reflect the direct relationship with London's anomalous sales market. Many people working in the capital require more time renting whilst saving for substantially larger deposits when compared to the rest of the country.
Additionally, international executives may also be contributing to the robust rental market. With a shortage of available properties to view, some will be occupying rented accommodation while they search or wait for the completion of off plan property. The number of interested buyers attending viewings is up by one third on the previous year and reports are emerging from estate agents that there is simply more demand than available supply.