Home prices in London are expected to remain unchanged this year after Prime Minister Theresa May’s Conservative Party failed to secure a majority in the Parliament, reported the South China Morning Post.
According to Knight Frank’s Group Chairman Alistair Elliott, there would be more residential transactions in the capital during 2017, but prices would be flat given the uncertainties over a hung parliament amidst the Brexit negotiations.
“I don’t see any great rises in pricing but I think the volume will be better than last year. There will be more trading but the level of pricing will be pretty static. (That’s because) I believe there is some general caution about the prospect of what Brexit really means.”
Nonetheless, he believes that home builders are unlikely to raise their unit prices, given the double-digit growth recorded by the residential market in the past four years.
“I think there are developers in London who are sensible enough to take a good deal now rather than trying to be too aggressive about getting a higher price. So I think people will be competitive in their approach to selling.”
Meanwhile, a study jointly conducted by the London School of Economics and the University of York for the city mayor’s office revealed that foreigners bought 3,600 of the capital’s 28,000 newly built homes from 2014 to 2016, translating to a market share of 13 percent.
In particular, people from Hong Kong and Singapore made up nearly 50 percent of the transactions by overseas buyers, followed by Malaysia and China.
Foreign investors are reportedly investing in London flats for the purpose of renting them out, a practice that has been criticised by Londoners, who are urging their government to limit overseas purchases to make housing more available for the locals.
Asian buyers have exerted “an increasing influence” in London’s residential sector over the past few years, noted Elliott, but their market share of 13 percent is still “manageable”.
This article was edited by Denise Djong.
