Graham Norwood´s Property Market Update - March 2008

Casual observers have every right to be confused.

Media pre-occupation with mortgage and banking crises seems contradicted by six house price indices released in March, of which four showed rises and two falls. So is London’s market weathering the storm? It’s too early to tell but signs of trouble, if they appear at all, won’t be found in interest rates or house prices in the suburbs.

A more important indicator is confidence – do international buyers still see London as a safe bet?

Buying agents like Property Vision, Black Brick and The Buying Solution are in daily contact with foreign purchasers and without exception they tell me central London is still seen as an excellent investment. One buying agent describes a client this way: “He has a 10 year view of the market and is happy to rent the property out in the meantime, confident it will appreciate over the decade.”

For us mere mortals with homes of £500,000 upwards, prices are softening but not by much – and they’re still far higher than in spring 2007.

If London-centric indicators like City job levels or the capital’s economy deterioriate, then there’s trouble ahead. But right now it seems we’re living to fight another day. For the moment, at least.