Shortage of homes fules 2013 house price rise

Recent data from the Office for National Statistics shows house prices in London have risen 9.4% in the past year. This compares to a 3.8% average rise across the UK as a whole.

A few commentators have started to use the word ‘bubble’ to describe this rise, but we at ludlowthompson believe this is some way wide of the mark.

The fuel for the rise in house prices in London this year has been the structural shortage of residential property, rather than speculation.

This is creating a sharp mismatch between supply and demand in London’s residential market, as buyers look to enter the market before prices rise too much further. The result is a great opportunity to sell for homeowners in London, with buyers willing to compete for properties.

Stephen Ludlow, Chairman, ludlowthompson, says: “This price rise is built on solid ground – the structural shortage of residential property in London. This isn’t going to change in the near future. We believe that these rises are sustainable at their present rates."

A report published this week predicted that average London house prices would increase by more than 43% to £650,000 by 2020.

Stephen Ludlow continues: “Homeowners who may be looking to sell in the near future could be missing out on an opportunity to move up a rung on the property ladder. Properties for first time buyers are selling in extremely short periods, so current homeowners can make a quick sale and buy a slightly larger home before demand for those properties becomes as high as it currently is for first time buyers."