Demand for residential properties in London remains high but after months of lockdown, many homebuyers are re-evaluating what they want from their home, so we are seeing a shift in the types of property in highest demand.
Perhaps the most significant new trend is the need for larger homes, with more space, both inside and out, as well as a location close to parkland or other open green spaces. So many people are looking to move to areas that lie on the borders of inner London and outer London where they can find larger homes within their budget.
Areas such as Hampstead, Highgate, Richmond, Barnes, Putney and Clapham are at the top of many wish lists and demand in these outer prime postcodes is increasing, noticeably.
A surge in enquiries for homes in Hampstead and Highgate
Hampstead has always been sought-after thanks to its beautiful period architecture, strong sense of community and family-friendly vibe, and the area is enjoying a mini-boom thanks to buyers’ changing priorities. Nearby Highgate, West Hampstead, Belsize Park and Dartmouth Park are also enjoying this post-pandemic ‘bounceback’ with buyers competing for properties with extra room and outside space.
And while Spring and Summer are always the busiest times of year for property sales in Hampstead, this year the pent-up demand from buyers keen to move close to beautiful Hampstead Heath, after a year of lockdowns and restrictions, is creating a surge in enquiries. Many of these are from cash buyers who have sold their previous property and are ready to commit to a purchase. Those moving from central London are looking for space so three or four bed apartments and houses are particularly popular. Smaller one and two bed apartments are popular too but the market for these is more price sensitive.
Interestingly, we’re seeing a mix of domestic buyers looking for a home, as well as investors, particularly from Hong Kong (BNO passport holders), Singapore and South-East Asia generally looking to invest and live in Hampstead.
But the growing demand does mean that we have shortages of stock so we are keen to talk to sellers who are looking for a local estate agent to sell their property.
Soaring demand for property across the UK
This surge in demand for Hampstead properties is characteristic of many areas of London and the UK generally, leading some commentators to speculate whether estate agents will start to run out of stock.
Across the UK, Rightmove has reported record-breaking house prices due to the high demand from buyers and shortages of stock, coupled with low interest rates and the Stamp Duty holiday. In fact, they have just reported that the national average house price rose last month to £327,797, an all-time high. On a national level, Rightmove’s latest Index says it expects that ‘some of the froth is likely to come off the market later in the year once some government measures end, (but) we expect activity to remain robust for the rest of 2021’. You can read more about how the staggered stamp duty extension has been impacting London’s domestic and foreign buyers here.
Meanwhile, Zoopla’s latest property index shows that over £149bn of homes has been sold so far in 2021 – nearly double the value of homes sold subject to contract in the same period in 2020 and 2019.
How is the inner London property market performing?
While clearly the property market on the outskirts of London is extremely busy, properties in prime central London retain their appeal too and parts of the property market have been performing very well. Many professionals are choosing to live closer to their place of work and as offices start to re-open, a short commute on foot from home to the office is a very attractive option, coupled with a longed-for return to familiar cafes, restaurants and other amenities – life getting back to normal – something we are all craving. So as London continues to open up after the latest lockdown, momentum is building across the prime London property market, with an increase in demand which is a positive sign for the rest of the year.
At the upper end of the market, the current Stamp Duty holiday holds less relevance for buyers so we expect demand to keep moving forward steadily, unaffected by the end of the Stamp Duty holiday in September. Read more about prime buyer demand here
How are overseas buyers reacting to the new 2% Stamp Duty surcharge?
Another positive indicator is that the new 2% Stamp Duty Land Tax (SDLT) surcharge for overseas investors not resident in the UK (which took effect from April 1st 2021) appears to be having very little effect on demand from overseas buyers.
In fact, the mix of low interest rates, the weak pound and good value property means that we are seeing a boom in enquiries from overseas buyers who are finding that these advantages more than outweigh the additional 2% surcharge and that real value can be found in London property at the moment as we all look forward to better times.
Contact us for a free valuation of your property
With so many variables at the moment, the London property market is even more complex and fast-moving than usual. If you are hoping to buy a property this year then contact our sales team who are always happy to share the latest market intelligence and house values. And if you are planning to sell your London property, we would be happy to provide a free market appraisal in person, or you can use our handy online valuation form to get the ball rolling at your convenience.
View all posts by Anita Mehra