Is the property bubble about to burst!?! Are you ready?  According to The Times only 40% of today’s 25-34 year olds are London home owners in comparison to the massive 70% in 1991. As a woman in this age bracket it is increasingly infuriating trying to buy in South West London; I am born and bred from the Richmond Borough and would love nothing more than to own a home within my area. The Times says the average Londoner would need to triple their salary to £87,000 to buy an AVERAGE priced property in London! With the current sales market I am unsure my dream of buying in SW will come true! We are all aware the property prices are continually increasing in London, CBRE forecast suggests over the next 5 years the average house price will rise by 30%! They say this is due to the rising economy as well as a strong desire to invest / live in London. The Business insider also suggests the combination of rising property values and over-construction are affecting the London sales market.

As we all know there is an increasing supply of new build properties in London – especially thanks to Battersea Power Station and Nine Elms in the heart of South West London. The Financial Times have stated over 54,000 new homes are currently under construction or/ planned with most close or above the 1m mark! Yet interestingly In contrast – only 3,900 properties were sold for more than 1m in London last year – what will happen to the rest? Callanan further backs this by the property data provided by LonRes which states 30% of the Nine Elms district have been on the market for more than a year!

According to the Financial Times usually the ‘normal’ number of properties on the market at one time would be between 250 to 500 (January 2014), so the mean being around the 300-350 mark, however this month it is at 2,000 – a quadruple rise! The Business Insider suggests if the bubble is going to burst – new builds will be the catalyst and it all starts in SW8! At this point, the only way to stop the rise in prices would be if the government makes regulation changes or an overall economic downturn – which means, the bubble will inevitably burst!

What does this mean for the estate agency sector – certainly those businesses with a strong Lettings division will weather the storm and flourish as they did in 2008-2010, however those businesses over reliant on Sales will definitely be in trouble.

What do you think? Are we in a property bubble?

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