Several media sources recently covered the story that estate agents in the more exclusive parts of London are offering incentives to home buyers. These inducements include department store vouchers, furniture packs, smartphones and high-end tablets, travel deals and even brand new cars.
The reason for which agents are increasingly resorting to this type of strategy is that the prime or luxury end of the London real estate market, in stark contrast with cities elsewhere across the UK, has been showing worrying signs of slowing. See, for example, this report from the Daily Telegraph: http://www.telegraph.co.uk/property/house-prices/house-price-growth-hits-12-year-high-northern-cities-london/. Why?
London is more vulnerable to Brexit ripples than other parts of Britain owing to so many European businesses being headquartered there. Equally, while there is uncertainty around the shape of the country’s exit agreement with the EU, overseas investors, who traditionally buoy the London housing market, are wary of buying properties in the capital.
Housing economists have argued that houses and flats in London are simply reaching an affordability threshold and that prices have no room for upward growth.
3. Market correction
The property gurus also take the view that valuations are stretched to such a point in parts of the capital that a market correction is probably overdue. There is also something of an oversupply of prime residential real estate weighing down house price inflation.
There are, in fact, indications that the market in other parts of the UK is slowing. Just to exemplify, the latest Halifax house price index showed that prices fell by an average of 0.2 percent in the three months to April. Figures from Nationwide and the Office for National Statistics were similarly sobering, with analysts suggesting that concerns about the wider economy and pressure on family incomes were subduing the housing market.
This being said, house prices are holding up remarkably well in many places. For instance, http://www.tgres.co.uk/ Gloucester’s trusted Estate Agency can confirm, the average cost of a property in Gloucestershire has risen 7 per cent to some 276,680 in the past year. At this stage, it seems unlikely that any Gloucester estate agency will need to offer the sorts of incentives being seen in London.
Houses and flats in this part of the country seem to be doing a great job of selling themselves, no iPad needed!