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London property prices continue to rise despite OBR warnings

By Ed Magnus
July 30 2020, 10.15

London property prices edged up by 1.7% during the 12 months to June 2020, according to figures released by Zoopla. 

Property prices across the UK continue steadily to rise, with an average increase of 2.7% being recorded over the past 12 months.

Zoopla research and insight director Richard Donnell said: “Given current trends we do not expect the rate of annual growth to move into negative territory over 2020.”

The latest Office for Budget Responsibility (OBR) projections for house price falls range between -3% and -16%.

Mr Donnell suggests that the OBR’s forecasts are quite dramatic and that Zoopla expect any falls at a national level to be at the lower end of this range, which would only begin to materialise in 2021.

According to Zoopa, the closure of estate agents during lockdown reduced the number of agreed sales by 90%. 

As a result of this, the property market is set to see 124,000 fewer sales in 2020 (a combined value of £27bn).

Mr Donnell reports that, with lockdown restrictions being relaxed and the new stamp duty holiday, the supply of properties on the market as well as agreed sales have now recovered to pre-lockdown levels.

Mr Donnel said: “We expect sales volumes for 2020 to be 15% lower than 2019, which is a much improved outlook than a few months ago.”

In terms of speculation that people are deserting city centres such as London, Mr Donnell explained: “In London, we can see that the share of housing demand has shifted to outer and commuter areas while slipping back in inner areas since the lockdown.”

However, he believes this represents a short-term reaction to Covid-19 rather than a long-term ‘seismic shift’ in home buyers attitudes.

Feature image courtesy of ZGPhotography via Shutterstock, with thanks

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