Cash buyers fuel London home sales boom. According to Acadametrics London home sales exploded by 22% during August on the back of cash buyers not needing mortgages and a strong regional economyMake Text Bigger
In comparison, the rest of England and Wales was stuck in a rut with more static month-on-month figures.
The buoyant London market is put down to less worry about long term job prospects and cash-rich buyers not affected by difficulties in obtaining mortgages.
Prices rose an average 0.2% in the month but have also remained more or less static for at least five months, according to housing economists Acadametrics.
House values were up on August the previous year, but the rate of increase slowed to 7.7%. Prices are expected to continue rising but at a slower rate for the rest of the year.
The figures come from the group’s latest monthly look at the housing market in England and Wales, prepared for estate and letting agents LSL Property Group, whose brands include Your Move and Reeds Rains.
The report calculates the average price of a home is £222,454, down 4% or £9,374, from prices at the top of the market in February 2008 of £231,828.
David Brown, commercial director of LSL Property Services, said: “The pickup in house sales since the start of the year dropped off in August. The exception is London where high demand for prized property from cash-rich buyers has seen housing market activity increase. Some buyers will be wary of imminent public sector cuts and the knock-on consequences for the economy.
“In the short term we expect small fluctuations but no significant dip in the wider market. Regional differences may be quite stark as some areas of the country feel the effect of cuts more than others. Active first-time buyers are the key to a healthy housing market. Most are awaiting better products from lenders before making a move.
“Lending has been broadly flat and house price growth has slowed, with neither likely to pick up again until positive economic news helps to ease lending conditions. Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.”
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