Sunday, February 25, 2024
Real EstateUK

London property prices grew fastest in over three years before coronavirus crisis

London property prices

The city’s 4.7% annual price growth, the highest level since December 2016, was the largest recorded in any U.K. region and was more than double the national average of 2.1%

Property prices in London grew at their fastest pace annually in more than three years in March, the same month that the U.K. began its coronavirus lockdown, according to data released Wednesday from the government’s Land Registry.

The city’s 4.7% annual price growth—the highest level since December 2016—was the largest recorded in any U.K. region and was more than double the national average of 2.1%.

The positive performance reflected a post-election boost dubbed the “Boris Bounce” after Prime Minister Boris Johnson, who was reelected in December and who ushered in Brexit in January after years of uncertainty.

However, the swell looks set to be short lived and reflects a market operating outside of the uncertainty that the coronavirus pandemic has inflicted across the globe.

The U.K. announced its lockdown measures on March 23, and the real estate sector halted in response until last week, when restrictions on the industry were lifted in accordance with government guidelines. As a result, the house-price index won’t be published in the coming months due to the lack of properties being sold.

Though year-on-year price growth was robust in March, on a monthly basis, nationwide growth dipped 0.2% from February.

The monthly decline is “a sign of things to come,” according to Marc von Grundherr, director of London-based estate agent Benham and Reeves.

There’s a good chance we will see further grey clouds form over U.K. house price growth as the full extent of a property market lockdown becomes apparent, von Grundherr said in a statement. We expect that this decline will be most notable in London due to the higher price of buying leading to a more prolonged period of hesitation despite an ease in lockdown restrictions.

However, the strong growth seen at the start of the year and annually has provided a strong foundation on which the market can bounce back and fears of a market crash should now move to the back of our minds. Although, only time will tell, of course, von Grundherr added.

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