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March 22, 2023
Jeremy McGivern
Posted in: Luxury real estate London

Analyzing the Trends of London Property Prices in 2023.

London Property Prices | 

Are Property Prices in London Falling?

This is the question I am probably asked more than any other.

Unfortunately, it is a dreadful question to ask because it suggests that there is a simple answer.

And why wouldn’t there be when there are newspapers articles telling you about the property market on almost a daily basis?

But rather like losing weight, it is more complicated than just buying a jar of pills on the internet. Even if they do promise immediate results! In reality, to lose weight in a healthy way, you need to do a combination of things. Which include eating less, exercising more, sleeping better and having a more positive self-image.

And to do all these things will involve changing various habits like not having a larder stocked full of chocolates and crisps. i.e. Remove temptation and properly commit to the target of losing weight. Unfortunately, most people only try one or two of these things and consequently fail, i.e. it is not as simple as it seems.

If you are planning to acquire a property in London and rely on the question “are property prices in London falling?” You will not only choose to buy at the wrong time, but you will also overpay.

Let me explain why:

Firstly, the majority of the information you will read on property prices will come from newspapers or news sources on the internet. These have a negative bias because humans are more attracted to negative news. So by publishing stories about house prices falling, the publications get higher readership. Which means they can charge more for advertising. This is their business model.

The negative bias has been proven in various studies but let me give you a couple of examples that I use when I give talks for private banks, law firms and tax advisers. These are extracts from newspapers twenty years ago:

2002 – “Anyone contemplating buying a property to let in central London needs their head examined. This view is… the hard-headed message of a survey from the Royal Institution of Chartered Surveyors (RICS).

“The buy-to-let market is something you need to be very cautious about” says Jeremy Leaf, the housing spokesman at RICS. “It is not a guaranteed money-maker any more.“ The Daily Telegraph

2003 – “He [Roger Bootle] said: ‘The message is clear. Houses are now so over-valued that a prolonged period of falling prices is on the cards.’ … Some London ‘hot spots’ have already seen prices marked down in recent weeks, which has been attributed to lower City bonuses and Stock Market uncertainties.” The Daily Mail 1st March 2003

Forecasted Trends in the Property Market

If you are unaware of what happened between 2003 and 2007. UK & London property prices shot up with prices in the Royal Borough of Kensington and Chelsea increasing by just over 80%. And these weren’t just random predictions. Roger Bootle used to be the chief economist at HSBC and was also one of the Bank of England’s “Wise Men”! In other words, he was supposed to have a better understanding than anyone else. And yet he couldn’t have been more wrong!!

Now you may think that the “experts” predictions and analysis would have improved since then. What with the vast increase in computing power and data analysis. But this quote is from April 2020 during the lockdown:

Properties from Marylebone to Plymouth have seen their asking prices slashed. This dip is going to be followed by the biggest economic contraction of our lifetimes, possibly of the century, which will almost certainly mean another blow to the sector.

Even the Bank of England — which has been bullishly optimistic about the UK’s overall economic recovery — has forecasted a 16 per cent dip in house prices due to the virus.” The Spectator – 22nd May 2020

If you weren’t aware, prices in the UK increased 20% in the next 12 months! So again, the experts were shockingly, hideously, pathetically wrong.

But that is only part of the problem, because the indices that are quoted also differ because the way they collate the data is different. So, as I write, Halifax has recently reported that prices have increased about 2% but Nationwide, the other big property index, has just recorded a 1.1% fall.


London Property Prices

The Challenge of Finding Accurate London Property Pricing Data

Confused? I’m not surprised. There is a surplus of data and most of it is either inaccurate or hopelessly misleading.

The biggest problem is that all the information you will read about the property market is far too general to be of any real use. In the national papers they focus on the national figures but how can that possibly help you? Because what happens to house prices in Leeds will be different to what happens in Bournemouth which will be different to every other area in the UK.

The same is true for London. Do you really think that what happens in Brixton has any relevance to what is happening in Belgravia? So, knowing if prices are falling in London is not actually useful because it is an average which will almost certainly be misleading irrespective of which area you plan to buy in.

So, unless you are happy being fooled into paying too much for a house or apartment in London, you need to have a very clear understanding of what is happening to prices not only in your target area but also in your specific price range and style of property.

For example, in the last year in Notting Hill, prices for houses on communal gardens have increased 20%. Despite the fact that prices in prime central London as a whole are up about 2% if you use the general figure quoted in the press.

But that is only part of the story because townhouses with no gardens haven’t seen anywhere near this increase in prices. Different styles of apartments have also experienced different price movement.

These variations play out in different ways across London. So hopefully you can now see why asking “Are London property prices falling” is such a bad question. In fact, it is the cousin of that other dreadful question, “what is the average discount that can be negotiated at the moment?”, but that is a topic for another day.


London Property Prices

As a buyer, you have two goals:

  1. To find the best property your money can buy
  2. To acquire it for the lowest price possible

Statistically, only a tiny number of people manage to achieve both. In large part because most buyers simply follow the crowd and do what every other buyers does. e.g. Rely on websites to find properties and rely on the press or, worse, the estate agents for information on prices.

Hopefully, you will not fall into the same trap.

Contact Mercury Homesearch:

If you would like more information on this you can request a complimentary copy of my book. The Insider’s Guide To Acquiring £1m to £100m Property in London, by clicking here, emailing dee@mercuryhomesearch.com or calling 02034578855 (+442034578855 from outside the UK).

Alternatively, if you are serious about acquiring a property but:

  • need help finding the best opportunities including off-market properties
  • don’t like dealing with estate agents
  • would prefer to be represented by an experienced negotiator
  • want to avoid the wasted time, bureaucracy and stress suffered by the typical buyer

then please email dee@mercuryhomesearch.com or call 02034578855 (+442034578855 from outside the UK) to request a Strategy Call with me.

Whatever you do, make sure that you have better information than the other buyers in your target market and the estate agents, otherwise you will make an expensive mistake.

About the author, Jeremy McGivern

My name is Jeremy McGivern. I am the founder of Mercury Homesearch, the internationally renowned property search consultancy, and author of The Insider’s Guide To Acquiring Luxury Property in Prime Central London. I have been acquiring property in prime central London for clients for over 13 years.

Having physically viewed over 22,000 properties in prime central London, studied the details of over 153,400 apartments, houses and investment opportunities and spoken to 232+ estate agents every week for over a decade.

My advice is in high demand and has featured everywhere from Bloomberg Television, The Financial Times and The Daily Telegraph to Forbes India and Bahrain Confidential.

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