London is the city that leads the way with property prices, says one mortgage expert.Catherine Hearnden, director of brokerage site MyMortgageDirect.co.uk, said that when property values in the nation's capital change, the rest of the country tends to follow suit.
"I think it is wise to look at London as a guide to what is going to happen," she commented.However, she stressed that the future remains unclear and much depends on availability of employment and interest rates.
She added that mortgage lending is also improving, with banks and building societies now offering affordability multiples that are as good as they have "been for ages".
Her comments come in the same week, Nationwide announced that house prices increased by 0.4 per cent in October and are now 0.8 per cent higher than they were in the same month in 2010.
The average UK house value now stands at £165,650, although
London properties are in most cases significantly higher.
Despite this, David Warren, senior sales negotiator at Paramount, stated that the market has changed slightly in the past few years and the capital maybe does not have the same bearing nationally as it once did.
“I do think that the capital generally guides the rest of the
UK property market but it doesn’t seem to have been the same over the last couple of years," he said.
"Whilst we have seen busy periods since 2009 and a shortage of stock which has meant prices have risen by 20 per cent, it doesn’t seem to be the same across the markets outside London.
"I think this is due to the amount of cash in London, we are finding that at least 50 per cent of our transactions are being agreed to cash buyers and a large proportion of these buyers are parents from the UK, mainland Europe and Asia.
"People think London is a safe market. Where buyers outside London tend to be buying more traditionally with a mortgage, finding the deposit for these is hard in these tough times”.
London Property Market News