London homeowners considering selling their property may be taking note of a new report by the Nationwide, which says it expects the capital’s property market to cool.
The CEO of the UK’s third largest mortgage lender said that property prices may start to fall over the summer.
Various factors have influenced the booming London property market, including government schemes such as Help to Buy, very low interest rates, and the general economic recovery.
However, there has been concern over a possible ‘housing bubble’ – particularly from the Governor of the Bank of England, Mark Carney. His fears have been echoed by some voices in the government – most prominently the business secretary, Vince Cable.
Carney has been talking about measures to cool the market off for some time, chiefly manifesting in the creation of affordability tests for first time buyers. Now it seems either that those modest measures have worked very quickly, or that the market is automatically correcting itself, as Nationwide’s CEO Graham Beale said on Wednesday.
“My view is that in London we will see a natural correction through the summer months. That intense heat does seem to be dissipating a bit. We could be seeing the early signs of a natural correction,” said Beale.
Mr Beale also said estate agents have reported fewer property viewings coupled with some price reductions.
March saw a year-on-year average price rise of 17.8 per cent, but such large rises could be coming to an end if the Nationwide’s prediction proves correct.
The Nationwide reported underlying profits of £924m for the financial year 2013-14.
If you are one of our London homeowner insurance customers looking to sell your property then tell us if you have experienced any changes in the current market.