London Property Market Information

For the past century there has been a great deal of speculation on whether the property bubble will burst in the UK, but mainly will the magic bubble burst in London. For the past several years house prices has gradually increased. Every year there would be a big “Woo Haa” over whether the market was too saturated and if the house prices were over inflated.

The concept of inflation (rising house prices) derived from the fact that people had started buying London property market at a fast pace compared to properties being built. Thus using the Supply and Demand chart; Demand would become greater than Supply creating an in equilibrium in the market, further resulting in increasing property prices (“inflated” prices) compared to the real value of the actual property. A great deal of buyers were scared of the fact that if they didn’t buy now the prices would increase threefold and by then they would not be able to enter the market.

The Rent A Home London Teams personal view on this “bubble bursting”?

Well, land is land, the Earth is the Earth. With our currently technology we have no possible way of creating more land. So land (supply) will always stay the same, but demand is another story. The more people there are, the higher the need for houses. And with the ever increasing booming population, we are doomed! Just kidding – but the only way demand is going to go is upwards, especially with the exponentially growing population. Supply, may increase with man made landfills or man made islands but it will not be able to keep up with the worlds population. In short, demand will always out weigh supply. Consequently increasing the price of property because as we know if something is in higher demand people will want it more and be more willing to pay for that “something”, in this case land!

With regards to London, in our opinion – (just to cover our backs) emphasis on in our opinion, price will not go down or “burst” – it may stabilise. Right now in the news commentators are stating that workers in the UK are unable to afford a house until they have worked for X amount of years. Yes, and we will agree with that – BUT it is London, the capital of England. So the demand is not just restricted to UK, it is world wide. Outside the UK, there are a large group of wealthy individuals who want and are willing to purchase in property in the sought after capital of England, London. The foreign investment will create a demand even when local demand is weak or decreasing.

Buy, Rent & Invest wisely!

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