The London housing market has not escaped from the current general slowdown, but demand has remained robust with supply short at the super-prime end of the market, says new research.
DTZ Residential’s annual prime report on central London reveals that the lower end of the prime market is more likely to be affected by changes in City bonuses and the threat of job cuts in the financial services sector this year. Many buyers in this market need to borrow money to purchase a new home and might think twice when it becomes difficult to get finance due to tighter credit conditions.
Equally, the property and location have become more important in this weaker market. Where people buy and how good it is are very key factors for people to consider before they part with their cash.
Investors have become more cautious since August too, says the residential market review, influenced by an ‘environment of greater uncertainty and tighter availability of finance, but generally investors are not offloading their properties despite favourable changes to Capital Gains Tax.’
But there is good news for the top end of the London market, with wealthy individuals from rapidly growing economies still prepared to put their hands in their pockets to pay for a home in the capital. The report says buyers from places like India and China ‘are expected to provide a greater source of demand in the future.’
The DTZ analysis concludes: ‘Demand for residential property in the world’s financial capital will remain strong and can be expected to recover from the current downturn, supported by continued global growth in the number of high net worth individuals.’