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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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After years of more or less stable upward trend, the residential real estate market in London is expected soon to experience again a soft landing. The interest rate gradual increase since last November has to cool down the markets, to consolidate the gains and to prepare ground for another period of growth. The economic and financial foundations of Britain remain strong and despite the high price levels nobody expects market crash in the months to come.

Since our last examination of London market some two years ago, the price movement has been upward with brief exception of early 2003, when mainly political reasons like the Gulf War II made both investors and residents very cautious. If we look back to the general picture of the last 6-7 years, then the main impression is that the market in London represents an ECG-shaped diagram where approximately yearlong periods of booms are followed by much shorter phases of price stagnation and in the case of early 2003 of deflation. The strong economy in the recent years has helped UK to avoid the general economic stagnation that took place in many other European countries. Right now the market in UK is at the peak of its 5th period of growth since 1997 and if the diagram keeps following its usual pace, we can expect soon a brief market consolidation before the next phase of growth.

Some time ago OECD has warned that unless some special financial measures are taken, the booming UK residential market may pose a risk in long-term to the British economy. In order to put off such risks the Bank of England has gradually begun last fall increasing the interest rates from 3,5% to 4,5%. It's considered enough to cool down the markets and to prepare the housing sector for soft landing within 3-4 months.

In 2003 the price of an average residential property in London have grown by between 5 and 10%, reaching $520,000. With short stagnation at the beginning of the year, the growth has been more pronounced during the second half of the period. To compare, the prices in England and Wales have grown in 2003 by 15-20%, with average properties sold for $340,000. The strongest increase was observed in Northern England (30%) where the prices have started from lower positions.

2004 is expected to bring little surprises beyond the soft market landing, set in motion by higher interest rates. London, where the prices are the highest, will slow down the pace of growth below 5%. Northern England, where the investors' interest now is significant because of the existing price gap, will keep growing at more than 10%.

The boom, which experiences the real estate market in London, is in fact the third major development since WWII. The first and second were followed by substantial market crashes in early 1970's and late 1980's. With inflation more or less under control and with record employment, this boom looks more sustainable than its predecessors. So far London turns to be among the big winners of the globalization in the capital flows. Having begun earlier with the structural economic reforms than many of its EU partners in continental Europe, UK now reaps earlier the fruits of its efforts.

United Kingdom country profile:

• Area: 244,820 sq km
• Population: 60 million (July 2003 est.)
• Population growth rate: 0.3%
• GDP per capita: Purchasing power parity $25,500 (2002 est.)
• Population below poverty line: 17%.
• Main trading partners: US, EU countries
• Internet users: 34.3 million (2002)

(Source: CIA - The World Factbook 2003)

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See also the directory of companies providing real estate services in, and general real estate information of United Kingdom.