Originally posted by mickey
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I am based in Holborn and this year has been as busy if not busier than 2006-2007. The way I see it is that there is simply not enough property at the moment and this is leading to most homes being snapped up at asking price and above . Often this is through gazumpings, sealed bids etc. This is great if you are a vendor selling but not so good if you are looking to purchase.
Depending on who you ask, some will say foreign investment has led to the recent boom but this has always been an important part of the London property market. I believe that because banks have been able to tap into the funding for lending scheme, this has meant historically low mortgage rates have been offered which has motivated a lot of people to purchase. Furthermore, because lenders now have an appetite for BTL mortgages, vendors no longer have to sell but can instead release equity from their current home for a deposit and then rent it out. Again - this is leading to a shortage of stock.
Finally, the London property market has been helped by the lenders greater willingness to lend at the higher LTV's. A few years ago, banks put the shutters down for new business and were only interested if you had 25% deposit. This essentially put a block on the market as the majority of FTB's could not get £75,000 together to purchase at an average London property value of £300,000. You could cynically argue that this is because in a lot of cases it is not really the banks money being lent out which is why they are now offering 90% mortgages. The upside is that FTB's are back as they now have a fighting chance of squirrelling away a deposit and are not so reliant on the bank of mum and dad.
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