Property prices in London fell by 0.08% at the back end of last year, according to data released by the Office for National Statistics. This is compared to an average price growth of 0.1% in the rest of the UK. It would have been higher overall but for stagnant growth in the capital.
Watch and Wait
The biggest problem for landlords and other property investors is that most have adopted a “wait and watch” approach, which is causing further stagnation. People are unwilling to invest in prime central London property in case prices continue to fall, but with few investors, the market is not going to pick up.
Many experts are blaming the government for introducing the new 3% stamp duty.
“Punitive stamp duty rules can be blamed for halting transaction levels and if steps are not taken to reform the impact stamp duty has on the top end of the market, even just marginally, we cannot expect sales levels to increase or prices to change in 2018,” says Nick Leeming from Jackson-Stops.
There are also a lot of people who feel that the London property market is correcting after several years of strong growth.
“The capital is now feeling what many areas of the country have felt for a decade, which is stagnant property growth. Unsustainable price rises have finally caught up with the London market,” says Alex Gosling from the House Simple website.
North West Prices Rise
Right now, the best area for landlords to invest is the North West, where property prices have risen by 6.2% in the last 12 months.