London Property Market Report - Graham Norwood August 2009 Update

Graham Norwood is a well known journalist writing on the property market in the UK and internationally



One thing is clear - aside from the sad fact that it's another poor summer for weather. London's housing market is peculiarly well placed to recover strongly when the broader economy revives.

Look at the recent data. Land Registry and Nationwide data, released in the dying days of July, shows small house price rises across the UK but London performs more strongly than anywhere else. Developers who had mothballed schemes in Greater London are, in three cases, resuming work after the summer break because they believe demand is returning.

Now I hear that some London estate agents which had shut their offices and laid off staff - in some cases as far back as the summer of 2007 - are recruiting quietly. One has opened an office.

So is it all over? Are good times back? Well, no, at least not yet.

So long as the economy is depressed and the government unpopular, so confidence will remain muted. So we are talking about a year, still, before we can be sure of a definite recovery.

But the unemployment and reliance on mortgages which hampers house price rises in the regions, are not so prevalent in the London property market, making us uniquely placed to recover first.

Remember that as our wet summer plays itself out. It may be the only ray of sunshine we see.

Graham Norwood's Blog, June 2009 for Chard London Estate Agents

Housing market green shoots appear like mirages in the summer heat. They are on the horizon and then fade when you come close. Red tape, alas, appears all too real.

Word on the street now, amongst lettings and sales agents alike, is that many landlords have had enough.

£50 for a licence may seem small fry for landlords to pay if, as appears likely, a new initiative from the Department of Communities and Local Government comes to pass. But surely we’ve reached the point where landlords have to shout: Stop!

Think of what else they have to pay for. There’s the annual gas and electricity safety inspections, an energy performance certificate and inventory and deposit charges. Some need a licence if they own a House in Multiple Occupation – and if they did not quit as landlords when that law came in two years ago – plus a fire certificate.

Each of these measures costs hundreds of pounds, takes weeks to arrange, and bites into rental income at a time when landlords have to encounter hard-bargaining tenants and the prospect of capital values falling.

Little wonder landlords are depressed.

If MPs could stop completing expenses applications, they might consider scrapping the red tape if they want a sustainable private rented sector and a kick-start to the housing market.

What are the chances of that, then?