It is a sweltering day in the west
News this week that the government will give the Bank of
"We noticed a cool breeze coming in about eight weeks ago," says
"We could see that people were being more cautious and slower to offer," chips in
The pair are explaining why they do not think the new powers being given to the Bank, or a surprise interest rate rise, were necessary or desirable.
It is the rapid pace of house price growth in the capital that has raised concerns about a property bubble and led to the moves by the Treasury to limit the amount people can borrow. Annual price growth in the borough of Hammersmith and Fulham is running at 16.4%, with an average price of pounds 708,000, compared with pounds 172,000 for the
The Finlay Brewer pair say that at the pounds 2m-plus end of the market, buyers were already contending with talk about a mansion tax, 7% stamp duty, general election uncertainty and the knowledge, even before Bank governor
Down the road at a well-known estate agent, an anonymous staff member backs up this diagnosis of the local market's temperature. Eighteen months ago, a one-bedroom property would have gone for up to pounds 450,000. A year later the same type of flat might have gone for up to pounds 600,000, but that is changing. He says: "Literally in the last two or three months the pedal has just come off, and we've been seeing things slow down a little bit. Prices are still going up but we're not getting as many instances of 'best and final offers' and sealed bids. It has definitely cooled a little. Buyers are becoming a bit more sensible."
He reckons an interest rate rise would probably have minimal impact. Many buyers earn "considerable amounts of money" in the City. As to the moves to cap home loans, "that will probably affect first-time buyers a lot more".
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