Spring is in the air at last and a sense of optimism is returning to the London property market as we move into one of the busiest times of the year.
London house prices seem to be resilient; mortgage interest rates are coming down and we are seeing the traditional ‘spring bounce’ in the sales market.
In fact, according to Rightmove, although London property asking prices dropped from a high of £695,642 in October 2022 to £667,587 in January 2023, prices are now rising again. According to the well-known property portal, since the start of 2023, the average asking price of a London property has increased by 2%, from £667,587 to £680,806.
Shortage of properties for sale across London
Our teams of estate agents across London are seeing good demand from potential buyers and are carrying out increasing numbers of viewings, with demand outstripping supply and the shortage of well-presented properties becoming evident.
This shortage of properties is underpinning house prices, ensuring a more balanced property market compared to the frenzied market of the last couple of years.
Cash buyers driving demand
In many areas of London, overseas cash buyers dominate the sales market and they have been unaffected by recent interest rate rises, so demand from these international buyers has remained strong.
For example, we have just received a full asking price offer from an overseas buyer on a lovely two bed property in Colindale Gardens, on the same day we put the property on the market! We are urgently looking for more units to sell at this popular Redrow development – demand is always strong here and also at nearby Beaufort Park.
Hong Kong BNO visa holders moving to London are driving much of this demand in NW9. Many are cash buyers and their priority is to buy a home and start their new London life – wider economic issues are not as important. In fact, for these buyers, the continuing weakness of sterling offers an important advantage, giving them greater purchasing power.
For borrowers, interest rates are coming down
There’s also good news for buyers who need a mortgage. Interest rates are coming down again from their peak at the end of 2022 so fixed rate mortgages are becoming more affordable and rates are expected to fall further as mortgage lenders compete for new business. This should boost confidence and therefore enquiries.
Strong demand for high spec London apartments
High spec apartments with good amenities and transport links remain sought-after across the capital.
Our Malaysia and Singapore offices have just seen successful launches of several new developments, including West Hampstead Central.
Rental demand remains high, but starting to ease slightly
The cost of renting a London property has soared recently, driven by the shortage of properties and the influx of both international and UK professionals returning to London after the pandemic.
Some tenants are paying thousands of pounds in rent in advance – as much as £50,000 in some cases – or sign longer leases – to secure their chosen property.
Zoopla’s latest figures indicate that average rents in London have reached £1,978 a month – up 15.2% over the last 12 months. Meanwhile, Rightmove reports that annual rent inflation in London is running at 15.7%.
We are desperately short of stock of rental properties across London so are keen to talk to landlords about how we can help them let their property.
Thankfully, our 19 London letting branches are reporting that the crazy rental demand of the last year is now starting to ease slightly. Demand generally remains very high though, with new, high spec apartments in good locations at the top of most tenants’ wish lists.
Our Wapping branch is seeing strong rental demand at London Dock while our Canary Wharf branch is seeing luxury developments such as 10 Park Drive and Landmark Pinnacle, new, high spec buildings near London’s bustling financial hub, attract a lot of interest.
In West London, Grand Union remains popular. We’ve just furnished a brand new apartment here, which we let within just two days. Homes are also letting quickly at Verdo Kew Bridge and we urgently need new stock here.
Super prime rental demand remains robust
The super prime rental market remains robust too. We’ve recently received new instructions in The Bryanston, a collection of super luxury residences overlooking Hyde Park, one of London’s most exclusive locations and the response from affluent senior professionals is positive.
Contact us for more information
If you are buying, selling or letting a property in London, please contact us to see how we can help.
Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 20 prominently located branches and 11 international offices.