The North west London property ‘kicked off’ 2007 with a consistent demand for buying properties in St Johns Wood, Maida Vale and surrounding areas. Demands for lettings were also very high during 2007.
Sale prices peaked in the summer due to a high demand from buyers. The market changed dramatically for a period of about 5 months (February-June): in most cases, there was more than one potential buyer for each property and prices were soaring. Buyers were outbidding each other. Estate agents introduced a sealed bid system to identify the highest offers. The news for potential buyers came as a shock with a 15.6 per cent rise over the past 12 months, pushing the average price of a property in NW London up to £350,000
With the Bank of England raising interests’ rates to 5.75% in August 2007, the market finally started to slow down. There was much talk about interest rates continuing to increase and borrowers were concern that higher mortgage costs will leave them facing difficulties to finance repayments. As such, buyers decided to play it safe and waited to see what the market would do.
As Christmas approached, analysts noticed that there was a drop in prices of approximately 5 % in the NW London Area.
In the first few weeks of January 2008, estate agents in North West London received a lot of enquiries from buyers, showing that the demand was still very high in this area. But those buyers were making offers at 15 % under market value. These offers were not being accepted by landlords who were hoping that the summer 2007 soaring prices would continue for them in 2008.
About the author
The writer is Lewis Green who is the director of Greenstone www.greenstone.com