London property set to hit £1m landmark

New research has found that property in the capital could reach an average of £1m per home by 2020 if the current price growth continues, writes Richard Carr.

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London property continues to increase in price

London’s current supply and demand imbalance along with an increase in investment from abroad has seen the annual rate of prices increase up to 9.5%. Unlike many areas of the country, the capital was able to maintain its upward trajectory through the recent election.

It was from the aforementioned 9.5% figure that the £1m price was reached. Rightmove calculated that on such a current rate over the next five years the landmark would be achieved by the end of 2020.

This is good news for current home owners, but not so much for potential buyers. Richard Carr believes it shows the obvious need for more homes, but also for developers and planners to be more astute. He maintains that building taller would help solve the current problem.

Current high

At the moment, the current average price of a newly marketed home in London is at a record high of just over £620,000, which is up £5,000 on the previous record from last year.

“It’s a volatile time of year for average prices however, as potential sellers of higher priced properties tend to refrain from coming to market in the holiday period, but then get on with their home moving plans again in September partly influenced by children going back to school. The back to normal service has resulted in new seller asking prices reaching another milestone, with a new record high,’ explained Miles Shipside, Rightmove Director.

Affordability

As well as building more homes in general, a specific focus has to be paid to making sections of them affordable to enable first time buyers to enter the market.

However, this will only be achieved with the help of government initiatives to encourage home building.