The excess of demand over supply will be felt in the real estate market of London and South of England

 The property market in the UK recovering from the failure that occurred in the first half of the year. Seasonal assessment of the market, represented by the Ministry for Taxes and Levies of the United Kingdom showed that a total of about 100720 transactions were concluded in July 2015, which is 10100 more transactions than the previous month and even on 0,2% more than in July a year earlier. Thus, for the first time after 7 consecutive months of decline, the market showed positive dynamics. Since the increase in Stamp duty market experienced a decline in demand from buyers, which was accentuated by the uncertainty caused by the risk of the coming to power of the labour party in a General election in may 2015.

Of course, one can argue that the market is completely rosy picture. On average one property we have 12 potential buyers that will continue to put pressure on prices. On the background of the slowdown of prices of “luxury” property in London rising prices for luxury housing in the other UK regions, ahead of the growth of London.

The excess of demand over supply will be felt particularly strongly in the southern , South-Eastern parts of England and in London. In some places, where demand is particularly high, it is not excluded the phenomenon of “gazumping” on the market, when the sellers, in conditions of high competition among the buyers, arrange the auction and choose the buyer who offered the highest price for the object of real estate.

In addition, the mood of consumers are also influenced by the historically low interest rate of the Bank of England. Under the influence of ongoing conversations about raising interest rates, buyers are rushing to get a mortgage and make the transaction in the current favorable market conditions. All these factors can become drivers of growth in property prices in the short term.

® Alice Morgan G. 24.08.2015

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