London is a truly global city, an international hub for business, education and culture. And this, in part, explains why the London property market remains resilient despite interest rate rises and cost-of-living issues.
Many investors are cash buyers – over half the buyers investing in Zone 1 properties pay cash so they’re less impacted by wider economic uncertainty. They recognise the current situation is just another passing storm – and it will pass. So they’re quick to spot a buying opportunity. When house prices soften, international investors move in – not just because of lower prices but in recent years because of the discounts offered by the weak pound.
So for overseas buyers, London property offers excellent value right now. Historically, London property achieves excellent long-term capital growth. So while we may see relatively flat and slightly falling prices in the short term, (although this is against a backdrop of the frenetic activity following the pandemic), the potential for long-term capital appreciation remains strong. And this is driving most international investors.
For borrowers, mainly domestic buyers, there may be light at the end of the tunnel after months of interest rate rises.
First, UK inflation has fallen again – down to 6.8% in the year to July (from 7.9% in June) and is now at a 15-month low.
Second, some of the UK’s largest lenders have started to cut mortgage interest rates, including Halifax, Nationwide, Natwest and HSBC. This may indicate that the major banks believe the Bank of England’s interest rate may start to come down sooner than expected.
So we expect buyers to continue their property-buying plans, but they may adjust budgets downwards, buying a smaller property in line with their smaller budget.
A typical London property now costs 13.9 times the average household income, according to the Office of National Statistics (ONS). They’ve just revealed that in 2022, the average London house price was £510,000 and annual income was £36,800.
August tends to be quieter, with many buyers on holiday. But this year we are seeing more activity than usual. Our London sales teams are carrying out many more valuations than expected – buyers want their properties to be ready for the autumn upturn in demand. Buyers are looking for a deal in this softer market but many sellers are not desperate to sell so negotiations can take longer. But when they reach an agreement most sales are reaching completion, although taking longer than usual.
Property hotspots include Beaufort Park in Colindale, where competitively priced apartments often receive an offer after just one viewing.
We’ve also completed several sales in Watford, Watford area guide another popular location thanks to well-priced properties and good transport links.
We’re excited to announce that we’ll be opening another new sales and lettings branch in September – in Dartmouth Park. We’ll announce further details soon.
Our overseas offices are launching several exciting developments.
The next launch in our partnership with Barratt London is Hayes Village.
Our new Israel office is also carrying out a launch in conjunction with Barratt – this time at Ridgeway Views – the latest addition to Mill Hill Village NW7.
Our Hong Kong and Singapore offices are launching Sailors Wharf, part of Royal Arsenal Riverside, a successful regeneration project by Berkeley Group in Woolwich, South-East London.
They’re also launching a new phase of Andermatt, in the Swiss Alps.
Meanwhile, our Malaysia office is busy selling apartments at One Clapham Junction in SW11.
With such strong international interest in London property, our new Thailand office is organising property tours for several Thai clients and our teams from UAE, Qatar and Israel are accompanying clients to London over the summer too.
Many investors are planning visits to the latest London property launches and we find they really appreciate having a property professional from their local office to guide them, someone who knows the London market and speaks their language.
Increasing numbers of investors are again planning buy-to-let investments, taking advantage of strong rental demand across London.
With rental demand so high, our branches in developments including The Green Quarter and Grand Union in West London and Millbrook Park in North-West London, are seeing exceptional interest and we are taking on new instructions. But we desperately need more stock so please contact us if you are completing soon at these or any other developments.
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