The last few weeks have seen economic and political uncertainty in the UK – thankfully an unusual occurrence. But with the appointment of a new Prime Minister, Rishi Sunak, we look forward to greater stability.
Buyer demand remains resilient, although has softened a little in areas of North-West London. But this is against a backdrop of a very strong first three quarters of 2022 for our team of North London estate agents and we have already outperformed our own targets by a considerable margin. So, although the economic situation is changing, currently interest rate increases do not seem to have deterred buyers or sellers while the chronic lack of stock in areas such as Hampstead, Highgate, Dartmouth Park and Belsize Park, continues to underpin the North West London market.
We have a number of transactions completing right now and our buyers remain extremely motivated, very keen to push through their purchases. Most currently have competitive mortgage offers agreed which they won’t be able to match if their purchase falls through so renegotiating with their mortgage companies would almost certainly mean taking out a loan at a much higher interest rate.
And we continue to receive new instructions, with new properties coming to the market soon. One of these is a two bed, two bath apartment in West Hampstead, with a large garden and two parking spaces. This type of property is always in short supply so we expect this to sell quickly – at £1.8m it offers excellent market value.
The North-West London property market is, to a degree, insulated from wider market forces. The area is perennially popular with London’s professionals so properties here are always in high demand. And despite recent economic instability, most sellers here are not forced to sell their properties due to their economic circumstances. So they are waiting until the market and the economy settles down again. So, we expect prices to remain relatively stable – any slight market correction is likely to be temporary and the relatively limited supply of properties in the area should continue to underpin property prices.
So while recent market conditions may cool a little, the resilience of bricks and mortar in tough economic times, is proven, after all most of us are driven by the desire to own our own home, whatever the wider economic landscape.
Hampstead and Highgate are particularly resilient, so most buyers will wish to move forward with their current homebuying plans, whether this is taking the first step onto the property ladder or indeed making their next step, upsizing, downsizing or simply looking for a different type of home. And while we don’t expect to see a flurry of new instructions in October and November, as we would normally expect at this time of year, in the spring, activity levels should pick up. Especially as the new UK Chancellor has already taken steps to stabilise the economy and restore confidence.
Another positive is that the Stamp Duty cut announced last month is remaining. So first-time buyers will pay zero Stamp Duty on the first £425,000 (up from £300,000) on properties valued up to £625,000 (previously £500,000), helping to boost the lower end of the market.
Fortunately, the current weakness of sterling means that demand from buy-to-let investors in developments such as Beaufort Park and Colindale Gardens, remains strong, with prices in real terms significantly cheaper than a year or so ago for overseas investors, due to the weak pound. Most overseas buyers do not need a mortgage so are unaffected by interest rate rises.
These two factors in particular make this an excellent time for overseas investors to purchase UK property.
BNO passport holders from Hong Kong are a driving force in the property market in Colindale and Hendon where there is already a vibrant Chinese community. Most are coming to live permanently in the UK so are looking to settle down and many have been renting locally for a few months before deciding to put down roots.
Typically, they are cash buyers and are keen to find a permanent home, rather than rent, so they remain extremely motivated to buy and are relatively unaffected by recent uncertainty. Budgets remain good, with most buyers looking for a two bed property (with parking) at £500k or a three bed property (with parking) at £700k to £800k. As a result, we expect demand in these areas to remain stable.
If you would like to find out how much your property could achieve in the current market, please contact our sales teams to arrange a free, no-obligation market appraisal of your property.
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