With figures from both RICS and the Council of Mortgage Lenders (CML) suggesting a slowing housing market in the capital, Mortgage Solutions ran a poll asking if this would mean quieter times for brokers doing London-based business.
The results showed that 47% of advisers tthought the broker market could only grow, while 53% reported that activity had already slowed down.
Recent figures from Foxtons added weight to the argument that things were slowing down in the capital. The London-centric estate agent warned its profits will fall this year amid a “sharp slowing” in the capital. Foxtons said sales volumes in the July to September quarter were lower than in the same period last year and that it expected the market to remain “constrained”.
Meanwhile rival estate agent Marsh & Parsons revealed a sharp drop in the rate of quarterly price growth across the capital and predicted flat values until the end of the year.
David Hollingworth (pictured) of London & Country agreed that activity in London has calmed slightly. “The enticing rates that lenders are currently offering may help to temper that but some of the heat does seem to have dissipated,” he said. “In fact it’s not that long ago that the main fear was London was moving too quick so it’s not too surprising that tougher lending rules and talk of higher rates has hit consumer confidence.
“However brokers should still have a key role to play for all those reasons and borrowers are increasingly aware of the need to select a lender based on criteria fitting as well as the deal on offer.”
Buying agent Henry Pryor suggested that the London market may well seem to be getting quieter to those involved in the business of financing property transactions, but the main reason for this is the increase in cash buyers.
“Up to 40% of deals across the country are now being done without a loan. In the capital it’s even higher with funding coming from the bank of mum and dad and from funds from outside the UK. Transaction volumes recorded by both HMRC and from Land Registry suggest that prices may well be under pressure (at last) but that trading volumes have remained buoyant,” he said.
“I expect that winter will bring a chill to the housing market and the election in H1 next year will depress volumes as always happens but the residential market appears stable – at least until we know which political party has been chosen to run the economy for the next five years.”