EXECUTIVE DIRECTOR, DOUGLAS & GORDON
The Bank of England is deploying the Mortgage Market Review to cool the property market down, but sometimes good old market forces can, and usually do, take care of things on their own. Land Registry figures show a fall in average house prices of 0.4 per cent in a month. This was before the MMR, which is one of the last weapons left to the BoE before pressing the interest rate button. Anecdotal evidence here at D&G is that buyers are close to, or at, their limit. London property is subject to the same rules as everywhere else and the gains we saw previously are now slowing rapidly and beginning to plateau. Previous downturns were fuelled by huge borrowing. This time, many buyers in central London are paying by cash, so the chances of a mark-to-market adjustment elsewhere should rates rise are minimal.
Our figures show a return to trend growth in London. I wouldn’t like to be sitting in No.10 if the latest MMR changes start to drive fragile gains outside the capital into reverse before the election.