The London real estate market is close to overheating

The average asking price for residential property increased by 0.7% in the UK and the growth of prices in the regions even surpass London, the latest index.

For four months in a row, there is a continuous rise in prices, and since last month, prices in the South East UK, South West and Scotland show the greatest increase of 1 % and more.

Prices for residential property in London rose by 0.8% , but, according to representatives of real estate companies of London, given the limited supply and high demand, the residential property market of London, early signs of overheating.

The combination of reduced time of finding the property on the market and quite a small flow of new proposals will contribute to the maintenance of prices will increase the confidence of the construction sector.

Rising prices for residential property in London lags behind the South East, where prices rose 1.2%, the South-West, showing a growth of 1% and Scotland, which also recorded growth of 1%. The Southeast in General shows the steady rise in prices for four months in a row and prices are now 3.9% higher compared to the same period last year.

The average asking price for residential property in London is now £376,021, that is, recorded growth of 7.5% over the 12 months. This certainly suggests how long such high rates of growth in property prices in London may continue? Currently, each year in London by 14 % reduced the number of new buildings, which, of course, will only contribute to the increase in the prices of residential property in London.

If we see a normal seasonal statistics this spring, more sellers will enter the market this spring. However, total sales showed significant growth this spring , and sales of real estate in new buildings decreased by 4 % for the year, and for two years from April 2011 – 22 %. London and Mid-Western part witnessed the largest decline in sales of new real estate, where the corresponding figures were 14% and 8% respectively.

For the regional market of residential property in the UK is characterized by the reduction in the time sales. Standard time of sales decreased to 28 days from 102 days last month.

Regional differences in the time of presence in the market still exist, but it declined in all regions except the northeast.

Almost six years after the crisis, we finally saw a strong performance in the UK, which , fortunately, due not only to rising prices solely on property in London. Currently, and other industries began to show signs of recovery, which in turn stimulates the interest of buyers and sellers trust.

Dazzling the market in London continues to show miracles of growth, but it is, perhaps, likely to cause fear, that .to subject to the spiral of prices and stagnation in some buildings, early signs of overheating of the London property market becomes too obvious.

Similar concerns were expressed by Agency Мoody’s, warning about the danger of the emergence of a new bubble. The improvement in confidence of the UK market combined with the support from the government may stimulate regions of the country, and the market of London there is a clear price bubble.

® Helen Entree. 15.05.2013