‘Quit while you’re ahead’. That was the headline on an article about London house prices in the Sunday Times last month. It suggested – as we often have here – that those who have made vast gains in the London market take advantage by selling up and moving out.
Why now? Because the gap between London property and non-London property is the widest it has ever been. It makes sense to think it will start to close again. Perhaps London prices will fall (however unlikely that might look today) or perhaps the gap will simply narrow back to historical norms as house prices elsewhere rise.
It isn’t happening yet. ONS numbers show that while average house prices are rising at 6.8% in the UK as a whole, and 7.1% in the southeast, London prices are rising even more – 13.2%.
But before you dismiss the idea that the gap might start to narrow, you might read my colleague Matthew’s piece on the subject.
Then note that not all of London is in the eye of the boom – break it down by area and you will see that some parts of the city are seeing prices barely budging (prices in NW1 only rose 3% last year).
Finally, note that – as we have suggested many times in the past – demand creates its own supply. More than 150 new residential towers are planned for central London at the moment, says the FT, involving thousands of new homes. So many that even Savills “concedes that there are already enough homes planned in the coming years to satisfy demand” at the top end of London’s housing market.”
The result is that “we do have concerns that some of these schemes aren’t sustainable”, says Chris Taylor, chief executive of Hermes Real Estate.
We still think it’s a good time to make the trade (assuming you want to live in a Wiltshire manor house rather than a three-bedroom terraced mini-home in Balham).
So what can you swap a house in Fulham for?
Sell this four-bed terrace for £1.65m, and buy this six-bed detached house with ten acres of land in Wiltshire
Perhaps set up a hotel in this ‘former Gentleman’s residence’ with 14 en-suite bedrooms, 3-bed penthouse flat, bar, and ‘distant’ sea views