The London sales market – January 2020

After several years of subdued house price growth, we have at last seen some positive news for the London property market. The recent General Election win by the Conservatives (and so the greater clarity over Brexit) means that we now hope to see a period of increasing political stability and therefore greater confidence amongst property investors. Buyers who have been holding back on their investment plans are now showing renewed interest in London property.

Our latest quarterly house price index

Benham & Reeves Q3 Market Index

Against this backdrop, we have just published our latest quarterly house price index (based on data from the top four existing indices). It shows that the current overall average UK house price is £252,487, up 0.3% on the previous quarter and up 0.9% on an annual basis.

And in London our data shows that average property values have reached £513,180, up 0.2% on the previous quarter although values are still down -0.8% on an annual basis.

Across the UK, the Nationwide index has revealed that December saw a 1.4% year on year increase in house prices, the first time in 12 months that prices have grown by more than 1%. While this is not a dramatic increase it is definitely a step in the right direction and hopefully an indicator of a more positive outlook in 2020.

Investor reaction

White City Living, W12

We are already receiving increasing numbers of acquisition requests as investors recognise that current discounts from developers will not last forever and that sales prices are stabilising, against the backdrop of a strengthening pound. In particular, we are seeing increasing demand from buyers in Asia and the Middle East. Most of these investors are happy to discuss buy-to-let opportunities throughout London, their key criteria being growth potential and rental demand. Their decision is usually based on the reputation of the developer and the development itself, the local area and amenities, transport links and of course the asking price of the property.

And, as the fundamentals of investing in London property have always remained strong, we expect pent up demand to be a major factor in the market this year. The key to successful property investment now is to focus on property hotspots which offer a combination of capital growth potential and strong rental demand and yield.

Currently, these include new developments such as Oval Village in Vauxhall, SE11 (Zone 1), White City Living in W12, (Zone 2), Clarendon in N8 (Zone 3), Southall Waterside in Ealing (Zone 4) and Eastman Village in Harrow (Zone 5).

First-time buyers

While investors have proved reluctant to purchase recently, first-time buyers have never left the market. In fact, according to Nationwide, the number of first-time buyers increased to 354,400 in the year to October, more than double the number at its lowest point in 2009 and the fastest rate of growth since before the financial crisis. We expect first-time buyer activity to increase further as the market picks up generally.

So if recent events have prompted you to consider your next London property purchase, whether you are a buy-to-let investor or a first-time buyer, call our London sales office on 020 3280 6400 or email them to find out more about some of our latest opportunities.

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About the Author

A board director since 2001, Marc oversees the company’s London rentals operation as well as marketing and developing strategies for new business. He has been instrumental in the company’s expansion, working closely with managing director Anita Mehra to develop its core services and frequently co-hosts property seminars for investors in many international locations. Read more about Marc von Grundherr here - Read full profile

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