News & Views Blog

Although prices of million and multi-million pound homes may be more vulnerable to weaker City bonuses, prices of normal family homes will ultimately be supported by the strong jobs market, continued migration to the capital and the shortage of housing.

Worryingly, there are reports emerging that a growing number of people are thinking of selling their home and moving into rented accommodation until property prices fall.

It’s a dangerous game to say the least. Speculating on the property market with your own home is definitely not for the faint-hearted. The average London property has to fall over 7% in value before you even break even once you take into account all the costs of selling, moving and then buying again; stamp duty is the biggest cost.

For people in more expensive homes, the market has to fall further still – over 8%. So you need the market to drop a very long way before this starts to look like an attractive prospect. And you have to consider how much the hassle and upheaval is worth to you.

The London rental market is certainly very busy at the moment. Tenant demand is strong and rents are rising rapidly. There is a lot of competition from tenants for the nicest homes, so those selling up to move into a rented home will have to fight for the best property. Good rented accommodation for a family in a decent school catchment area is like gold dust.