Major report on London house prices reveals 'golden age' of soaring property values is OVER

A major report warns of the end to the 'golden age' of booming London house prices
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The long “golden age” of booming house prices was declared over today in a new report warning that the London market will stagnate for another two years.

Agents JLL said that the quarter century from the Eighties to the financial crash when “house prices marched ever upwards” is unlikely to be repeated.

JLL’s latest forecasts for London foresee no price rises next year and only a feeble 1.5 per cent recovery in 2019 followed by two per cent growth in 2020.

In central London the upturn will be even slower with just a 0.5 per cent rise in prices in 2019 after a flat 2018.

Andrew Burrell, JLL’s head of economics, said low pay increases, interest rate hikes, and, in London, less demand from Europeans after Brexit, meant “an end to the Golden Age for house prices” and “a return to the pre-1970 era of stability.”

Over the past two decades London property prices have surged by an average 9.5 per cent a year.

The forecast was issued on the eve of a widely expected move from the Bank of England to lift its interest rate for the first time since 2007.

It also came as building society Nationwide said that nationally house prices inched forward just 0.2 per cent in October, down from 0.4 per cent in September.

Agents said London prices fell again in October and saw few signs of a pick-up. Alex Gosling, chief executive of online estate agents HouseSimple.com, said: “It’s only November, but it feels like the housing market will limp its way through to the New Year now with buyers and sellers holding off on making a decision until 2018.”

However, the JLL report downplayed hopes that a house building bonanza will make the capital significantly more affordable for young Londoners still trying to get on the ladder.

It predicted that housing starts are set to remain stuck at around 25,000 a year, less than half the 66,000 target due to be set by Sadiq Khan later this month in the new London Plan.

The forecasts came as the boss of London’s biggest housebuilder Berkeley issued a call for developers, City Hall and boroughs to work together “in a sprit of co-operation” to solve the housing crisis.

Tony Pidgley, chairman of the Berkeley Group, said: “If we really want to build homes for all Londoners, the private and the public sectors have got to collaborate. There is a solution if we all work together.

“The reality is that most development in London involves complex, brownfield land which requires a huge amount of time, expertise and capital.

“Housebuilding is painfully slow, not because of build out rates or a skills shortage but because of the uncertainty and division.”

“The Berkeley Group alone has land without planning permission that could deliver 20,000 more homes. If we work in a spirit of cooperation, these derelict sites can be turned into communities.”

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