The average property owned in London is set to be worth well over a million pounds in five years if London property prices continue to rise at the current rate, research from online estate agent, eMoov.co.uk has revealed.
Recently released figures show that London property prices have soared by over 17 per cent in the past year, raising the already high average house price to a value of nearly £460,000, according to the Office for National Statistics.
Research by eMoov shows that if the property boom continues at the current rate, an average London home will have appreciated by an average of £109,000 each year in the next five years. That is almost three times the £37,000 average yearly salary earned in London.
eMoov CEO Russell Quirk told the Metro that current homeowners in London are sitting pretty but he sounds a warning note – “What about first time buyers and the next generation?” he says. “Salaries in London are not increasing at the rate property prices are.”
Quirk has said that he firmly believes that the property market is spiralling out of control and that more regulation is needed as soon as possible.
“The Help to Buy scheme should be reined in,” he said, echoing the views conveyed by the European commision last week. “More barriers need to be put in place to negate further foreign investment in residential property.”
“More expensive areas like Westminster and Kensington are quickly becoming less popular as buyers are being priced out of the market.”
However, many experts do not believe that the boom is set to continue.
Sandfords estate agents recently called the top of the market after seeing signs of a slowdown in central London. The agency had noticed diminishing buyer activity and has more recently spotted applicant registrations and viewing levels begin to wane.
Sandfords property expert Andrew Ellinas told Metro that price levels in central London have peaked for the time being.
“In May, the average number of viewings has declined, demonstrating an ease in demand levels and, although prices have not yet fallen, they have certainly stalled,” he explained.
Mr. Ellinas believes that there is a simple reason for the slowdown: “Buyers are refusing to pay the current asking prices for properties in central London, after they have surged out of control.”
He thinks that prices have rocketed to “unbelievable levels”, and it is only now that buyers are putting a stop to the property madness.
Mark Coleman from Innovo Property added this “We estimate that 45 per cent of the properties we are instructed to sell are now overpriced by 10 per cent, and an additional 25 per cent of properties by as much as 20 per cent.”
The estate agents has been cutting the asking prices of many of the properties on their books, and are warning owners that they should look to be more realistic when it comes to pricing.
“All vendors need to be more willing to follow suit if they want to sell their property in what has become an uncertain market.”