One of the major concerns for 2023 was fears that property prices in the UK would plummet. Issues with interest rates, mortgage products, the cost of living crisis, and the threat of recession meant people were expecting the worst. However, the slump has not occurred yet. In fact, homes in London remain consistent. So, if you have been considering property investment in Newham or other parts of the city, you can be cautiously optimistic.

Land Registry figures

The latest figures for December show that it was a decent end to the year for house prices in London. The average cost was up slightly, by 0.03% or £188. Even a tiny rise like that is better than the bottom falling out of the market. It meant the average price was at £543,099.

Slightly better reading is the fact that December had healthier growth annually. If you compare 2022 with 2021, prices were 6.8% higher. In monetary terms that is £33,988.

If you look at it by borough, some areas had a very strong period. Tower Hamlets was the biggest grower, with prices up by over 20%. In terms of property investment in Newham, the area has the second highest growth at 12.3%. The top three was rounded out by Barking and Dagenham at 11%.

Market correction

Experts are now saying that an abrupt comedown in prices is not as likely. What is happening instead is a gradual correction of the market as it cools. As long as mortgages remain available with competitive rates, demand for housing is likely to remain high. So, prices won’t fall as much.

Initially the fear was house prices would crash by as much as 12% in 2023. However, experts are now predicting it will be a softer decrease of around 8%. If that happens it will bring prices down to 2021 levels, correcting the huge increase as the market reopened after covid lockdowns.

There is also more comfort in looking at the fact that the growth in the last few years was unlikely to be sustainable. Cooling would come eventually no matter what. So, if it is softer this year it will benefit everyone.

Areas that had strong growth pre-pandemic will likely see the biggest drops. This is because they have more to correct.

Talk to us about property investment in Newham

At Finefair Ltd we appreciate why London is such an attractive spot for investors. There are lots of opportunities, whether you are searching for a new luxury apartment ready for tenants, a family home that needs updates, or a bigger development or redevelopment. Investors can get some healthy returns in the city, but they need to think carefully about the market.

We can help here by offering a wide array of services. They can include arranging guaranteed rent, management, and more. We even provide portfolio reviews to see if you are missing out on opportunities.

So, if you are thinking about property investment in Newham or another area in the city, we would love to work with you. Get in touch to learn more.