The de facto campaign slogan for Bill Clinton’s 1992 election campaign was “It’s the economy, stupid.” Developed by his campaign strategist James Carville, he wanted to keep things simple rather than mired in all sorts of surveys and discussions. You could say that the current state of the British property market boils down to a variation on that same phrase, “It’s the demographics, stupid.”
Economists, politicians and property pundits can witter on for ages about what is driving house price growth in London however the reason is quite simple: the population of London is increasing at such a rate that there is no way there will ever be enough homes available to meet demand. Recently the Royal Institute of Chartered Surveyors issued a report stating that house prices are anticipated to continue to increase until 2020 with average annual growth of around six per cent nationally and an average London increase of over nine per cent.
With prices increasing and stamp duty at an all-time high, many would-be buyers are afraid to trade up the property ladder thereby exacerbating the chronic shortage of properties available.
After all, who would want to put their house on the market when they cannot see anything else they would want to buy? Property prices then go up as there is inevitably half a dozen buyers chasing every new instruction.
Our new financial year started very well with three houses exhanged in the first week alone. Our year end figures for 2013/14 show that we are up 55.08% on completions for both sales and lettings. It has been a phenomenal year and we anticipate that this coming year is going to be just as good if not better.
Britain has the fastest growing economy in the developed world which is attracting a strong workforce from around the globe. The government’s own estimates suggest the capital’s population is set to grow from just under nine million people to over 10 million within the next decade yet only 250,000 new homes will be built within this period. Even if every single one of those new homes was earmarked for owner occupiers rather than investors, it still would not be enough to meet demand. The new garden city at Ebbsfleet which was welcomed with such fanfare in the Budget will only produce an additional 15,000 homes. It is simply not enough.
It may be the demographics however anyone investing in property surely could not be labelled as stupid.Back to News