(Source: The Times)
Off-plan buyers have returned to the London housing market and are putting down deposits of thousands of pounds for homes that will not be completed for at least a year, amid a shortage of property for sale in the capital.
Experts said the re-emergence of the practice was a sign that confidence was returning to the property market as evidence grows that house prices are bottoming out. However, the option is available only to cash-rich buyers because mortgage lenders remain wary of new property, since they are less certain of a home’s true value.
Housebuilders are also cashing in on the rush for cheaper property by raising prices. One insider said: “Where there is good demand and sales are going well, we edge prices up. Not 20 per cent in one go, but we will take steps to see what the market can take.”
Nationwide has reported three months of consecutive price rises of between 1 and 1.3 per cent between May and July.
Peter Rollings, managing director of Marsh & Parsons, said: “In the London market, there’s no shortage of buyers with large deposits looking to take advantage of prices that are 20 per cent lower than a year ago in some parts of the capital. Added to that, a chronic shortage of properties for sale has intensified competition among buyers. The result is rising asking prices — and offers to match.”
Read Rebecca O’Connor’s full article “Off-plan buyers return as London property market perks up” in The Times (August 5, 2009).