Testing times for the property market

The desire to nest in North West London

“May you live in interesting times” is thought to be an English translation of a Chinese proverb. Whilst no such expression ever existed, it does nevertheless resonate and reflect the current market conditions affecting all of us. We have had to face a series of major events since the General Election in December 2019 including the Coronavirus pandemic from February 2020 until the present day, the current war in Ukraine (and its impact on energy costs and food supply), the fall of Boris Johnson’s government and the installation of a new government under Liz Truss. This, in turn, has led us to their recent mini-budget.

North West London has been both positively and negatively affected by all of the above. Firstly, the work from home environment meant that the leafy suburbs surrounding Hampstead Heath (which includes Belsize Park, Hampstead, Hampstead Garden Suburb and Highgate) have been in higher demand than ever. Current owners have also been keen to retain their gardens and green outlooks which means that stock levels have been low and therefore competition has driven values higher.

The number of quality state and private schools in the area has also always been a driver of demand.

As I write this article, the £ has had a roller coaster ride back to the levels at which it was trading before the mini-budget. There is also concern that other attempts to stimulate the economy, such as cuts to energy bills, income tax and national insurance, will all be dwarfed by higher mortgage bills as interest rates rise and are expected to rise further. Conversely, international buyers whose home economy is dollar-based may see this period as an opportunity to enter the UK housing market at a discounted rate.

Average house prices have risen by 23% since the start of the pandemic, so even if these declined by 10% in 2023, this would take us back to where we were last summer.

This is unlikely to happen in North West London, but is sustainable if it did.

In my 35 years as an agent in the area, with both National Corporate businesses and as a smaller independent agent, I have always been impressed and proud to serve an exceptional and dynamic local population that can withstand all the different pressures being imposed upon it from all the different directions. If the general market falters, then usually local vendors withdraw from the immediate market and wait for better times. This has the impact of limiting supply and maintaining value. Whilst there may be isolated incidents of forced sales, these are rare and the intrinsic value of any property remains strong.

The Hampstead/Highgate area is and always has been a most desirable place to live and work, with easy access to both London’s West End and The City and is my favourite part of London.

GRANT ALEXSON, Director of GA Residential, Hampstead

www.garesidential.co.uk