Housing market revival is great news for London
THERE is welcome news today that the London housing market, which has lain largely moribund in recent years, is showing signs of a vigorous revival. The estate agent, Knight Frank, reports, for example, that it recently enjoyed its busiest ever day for viewings, with one branch head saying that interest among prospective buyers has “exploded” since the start of the year. Other agents report a similar surge of activity with sellers, too, coming forward in far greater numbers and more than £10 billion of property put on the market since the general election.
The reasons cited for the revival include Boris Johnson’s decisive victory and the resulting end to the political logjam over Brexit which had left many uncertain about both their own and the nation’s future. Some of those doubts still remain, of course, but estate agents say there is now much greater confidence among buyers and sellers. Other factors include the pent-up demand on both sides of the house-buying equation, that now seems to be have been released with a burst, as both vendors and purchasers come forward in number. There is also the continuation of low interest rates, which the City is expecting to be trimmed further in the near future. Enthusiasm among overseas buyers is reported to be up too. All this is positive. It’s critical both for personal well-being and for the health of the economy that people are able to move home when they want, whether it be for a new job, more room to accommodate a bigger family, to downsize, or simply for a change of location. Home purchases drive other spending too, notably on furnishings and renovations, which can give a further lift to economic activity.
There are potential downsides, of course, and in particular the risk that overly rapid house-price inflation could make it harder for aspiring first-time buyers to enter the market. That wouldn’t be helpful, but it’s encouraging to see that today’s message from estate agents is that supply and demand are rising together in the capital, which should keep prices in check. All in all, it’s a promising start to the year and a trend that we hope continues.