The Greenwich property market is on the cusp of a tipping point. It’s a tipping point that will influence Greenwich house prices, the number of properties available to buy, demand for those Greenwich properties and the lives of every homeowner and the property-owning buy-to-let landlords in Greenwich. This shift in the Greenwich property market is a big deal so let me explain.

What are the two vital reasons for this shift in the Greenwich property market?

First, the easy-going Greenwich property market goldmine of the past couple of years will end. 

The bonanza of the Greenwich property market for house sellers, which was primarily fuelled by cheap money, is receding and the scales are starting to tip somewhat more in favour toward Greenwich buyers (which is not a bad thing - more of that later).

Secondly, and more significantly, this shift in the Greenwich property market is not a collapse. 

Let me enlighten you as to why this is.

One of the key influencing factors of the property market is what people pay on their mortgages. The higher the mortgage interest rate, the higher the mortgage payments.

Mortgage rates are usually 1% to 2% higher than the Bank of England base rate. Therefore, mortgage rates are increasing on the back of higher Bank of England interest rates. 

So, whilst we have seen rates rise four times in the last year, the Bank of England base rate stands at only 1%. Compare that with Bank of England base rates in the 1980s (when the average base rate was 12.63%), 1990s (when the average base rate was 8.8%) and the 2000s (when the average base rate was 4.7%). These high base rates (together with high unemployment) contributed to the woes of the UK property market crashes of the early 1990s and 2008. 

From the gloomiest economist, the worst-case scenario doesn't see Bank of England base rates rising past 3%.

This means the prospect of a housing crash is minimal because of the comparatively low unemployment and base rates still at all-time lows. 

What are the signs of the shift in the Greenwich property market?

The statistics show a slight shift in the scales between it being a 100% seller’s market for the last two years to more an 80% sellers and 20% buyer’s market and here are the reasons why:-

1. 

2.

3.Take all these things together and you can see that there are signs that the Greenwich property market has started shifting more into buyers’ territory yet is a long way from the traditional idea of a ‘buyer’s market’.

These points can be backed up with the house price data for Greenwich.

Gone are the days of October 2021, when Greenwich house prices increased by 3.5% in one month.

Yet last month, for example, Greenwich house prices only rose 0.9%, and the month before they rose 2.3%. Not all doom and gloom when you consider…

Greenwich house prices are still 6% higher than a year ago.

We have been in fifth gear for the last two years with extra rockets attached. We are certainly not going into reverse gear, more a drop down the gears to fourth!

I know many aspiring Greenwich homeowners are waiting for house prices to fall, however, I do not foresee any large Greenwich house price drops in the next few years. In essence, whilst I do believe the rate of house price growth will slow down, that does not mean it will go into reverse. 

Some would ask what increasing interest rates and inflation will do to the Greenwich property market?

As I’ve already discussed in several recent articles on my property blog, if interest rates don’t go above 3.5-4%, this will not be a game-changing issue for the Greenwich property market. Most homeowners are on a reasonably long-term fixed-rate mortgage (typically 5+ years) and will be able to transfer them across to the new house purchase if they want to move.

Now, of course, that won't help first-time buyers. I agree there will be fewer Greenwich first-time buyers, yet these will be replaced by landlords re-entering the Greenwich property market (as I discussed in a previous article a few weeks ago).

Greenwich house prices will also be further protected by the effect of inflation on house prices (again discussed in a separate article about a month ago).

As the number of properties coming to market has increased, the choice of properties to buy has expanded. This will encourage those potential cash home buyers who have also been waiting on the sidelines (alongside the landlords) to start viewing and making offers. They, too, have not wished to get into a bidding war but patiently waited for the market to ease.  

And it is for those reasons in this article (and my other recent articles mentioned above) I do not see a Greenwich housing bubble on the horizon.

If you would like those other articles, don't hesitate to contact me, and I will send you t