London’s housing market activity is expected to slow down next year as the withdrawal of government support measures and a difficult economic backdrop dampens the post-lockdown surge in demand.
The latest research showed that both demand for properties and new homes being listed for sales remained strong last month.
However a survey by the Royal Institution of Chartered Surveyors found that most respondents expect the recent uptick in sales to pause for the rest of the year.
Meanwhile, in 2021, experts said the outlook for sales is subdued as government support measures, such as the stamp duty holiday, comes to an end.
During October, the number of house hunters looking to buy a new home in London was positive for the fifth consecutive month, but it fell from a net balance of 23 per cent to 11 per cent.
The number of new properties being listed for sale was also up for the fifth month in a row, which is the longest consecutive run of growth since 2014.
Last month, 24 per cent of respondents to the survey saw a rise in transaction volumes.
Rics chief economist Simon Rubinsohn said: “The housing market remains very busy and despite the second national lockdown, the sense is that this will persist over the coming months and into the new year.
“However, there is understandably more caution about activity looking beyond the first quarter of 2021. Aside from the withdrawal of governments incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.
“That said, medium term expectations for house prices and private rents have barely been dented by Covid according to the latest survey. Indeed, the projections still point to increases likely to exceed wage growth highlighting the ongoing issue around affordability.”