London property market defies recession warnings with new record house prices

London stocks rose 1.9% in June (Daniel Lynch)

The resilient London Property the market continues to defy the gloom recession warnings and the cost of living crisis with average prices up 6.3% to a record £537,920 in the year to June.

The latest land registry data shows London values ​​rose 1.9% in June alone, adding nearly £10,000 to the average cost of a home in just one month.

Commentators said a lack of stock in the market, rapidly rising rents and a desire to grab attractive mortgage deals while they were still available were all factors behind the sharp rise in values.

Some of the biggest increases were seen in London’s already priciest boroughs, with prices up 12.2% in Kensington and Chelsea and 10.8% in Richmond.

Iain McKenzie, CEO of The Guild of Property Professionals, said: “With so much speculation about how the cost of living crisis will worsen and how household budgets will squeeze, you would be forgiven for assuming that the real estate market will experience significant changes. adjustments. The truth is that the opposite seems to be happening.

“Wages are currently failing to keep pace with inflation, which will affect how much people can afford in mortgage and rent payments, as well as how hard it will be for first-time homebuyers. save for a larger deposit.

“However, the current compression is unlikely to have a short-term impact on real estate prices, as real estate agents are always overwhelmed with requests for available properties. As rents remain high, many people are hoping to climb the ladder and achieve the stability of owning their own home, with the savings that can come with it.

Nick Leeming, President of Jackson-Stops Agents, said: “Pockets of hot markets, particularly in the South East and London, are regularly making rapid sales at the indicative price. Our Pimlico branch, for example, noted that closed deals increased by 20% in Q2 compared to Q1, consistently averaging 98% of the target price for sellers. »

Benham and Reeves agent manager Marc von Grundherr said: “The UK the economy is sailing abreast in very rough seas at present, as the captain remains on shore leave with no replacement to take the helm.

“But despite this, the boat has yet to rock when it comes to the real estate market and the economic woes of rising inflation, rising interest rates and the cost of living crisis. continue to bounce off the hull like mere pebbles rather than unexpected icebergs.

“It is inevitable that the real estate market will eventually slow down due to the high rate of nodes it has moved through throughout the pandemic, but we have yet to see any signs of sinking and it will likely remain the case.”

Tomer Aboody, director of property lender MT Finance, said: “As interest rates rise, some buyers will consider the cost of borrowing to remain at a much lower level than at other times, and fear further increases will push buyers into fixed rates, allowing them to manage their costs as inflation soars.

Nicky Stevenson, managing director of estate agent group Fine & Country, may be of interest: “The underlying reality here is that the boom is continuing, and on a remarkable scale given the number of headwinds that currently exist. Monthly growth has indeed remained stable in recent months