Overview of the London property sales market – October 2021

Demand for residential property in London remains strong and as we move into the Autumn, we are seeing transaction levels increasing at what is always a busy time of year for the domestic property market.

UK homebuyers are still driven by the need for more space (to work from home but also as they seek to enhance their lifestyle generally), and the desire to take advantage of record low mortgage interest rates as well as incentives such as the government’s 95% mortgage scheme.  These factors continue to influence the demand for homes.

And because house prices in London didn’t see the same surge in values as other parts of the UK due to the Stamp Duty holiday (the capital was more affected by the drop in demand from overseas buyers), the upside now is greater stability, with demand remaining consistently high.  And with those overseas investors now returning and injecting a new level of demand, the market will remain very strong over the next few months.

Demand intensifies in outer-prime London suburbs

In many outer-prime London suburbs (including Wimbledon, Dulwich, Hampstead and Highgate) house sales are incredibly busy and larger (three and four bed) family homes offered in good order are in very short supply.   In some cases, our sales team has been able to have an offer agreed on a property before the details can be sent out.  And at times we have had as many as six offers on a single property after just one day’s viewings.  This is also leading to the return of ‘gazumping’ as buyers try to outbid each other to secure their chosen property. As a London estate agent with sixty years’ experience, we are well used to operating in the peaks and troughs of the market and although we don’t condone such practices, there is little we can do about it other than to advise buyers to pit forward their best offer and have all their paperwork and finance ready.

A shortage of good properties for sale

As the recent Stamp Duty holiday prompted many to either take their first step on the housing ladder or to move up to the next rung, this has led to a shortage of good quality properties in many areas.  And this scarcity of housing stock in London means that house prices remain stable and are not softening, as is the case in some parts of the country.  We expect high demand to continue well into the autumn.  Of course, we may see a small dip towards the end of the year but seasonal house price variations are a perfectly normal feature of the market, particularly after such a period of record performance.

Transactions increasing

Most areas of London are experiencing this strong demand and while prime suburbs are the focus of many buyers, central London is also seeing a lot of interest.   Just a snapshot of our most recent transactions illustrates this perfectly.  At the premium end of the market, we recently sold a luxury £2m penthouse in Kensington as well as apartments in Holland Park and Walton Street, Chelsea SW3. A number of our clients have also completed on several buy-to-let apartments at London Dock Wapping and we’ve concluded some resales at Imperial Wharf, an established St George scheme in Fulham where we always have good rental demand.  We’ve also sold some new homes in the Nine Elms location and due to the new Northern line Tube station opening there and its fare zone being changed to zone 1, this makes commuting easy and affordable.  Due to our extensive client network, we also sold an apartment off-market at Kings Cross. These properties were bought by a mix of individuals – from the UK and overseas – for their own personal use or as a rental investment. So it is quite difficult to identify specific trends: quite simply the market is very busy across the board.

Overseas investors return to the UK property market

Until the last few weeks, demand for homes in London had been driven mainly by domestic buyers while demand from overseas investors has been understandably subdued over the last 18 months.  While virtual property viewings have been invaluable to us during the pandemic, we are now seeing international buyers travelling to London to view properties, prompted by the easing of travel restrictions and the increasing feeling of confidence that the world is getting back to ‘normal’ and Covid 19 is becoming something we are learning to live with.

Our sales team has been handling transactions for growing numbers of overseas buyers recently and enquiry numbers are increasing due to our marketing activities in the South East Asia and the Far East.  Some investors are buying for their own use – as a London base for themselves or sometimes adult children who are studying or working in London.  Some are also now expanding their buy-to-let portfolios now that rental demand has increased so dramatically in London over the last two months. Click the link to read up to date news about what’s happening in the London rentals market.

Space is a priority

Another interesting trend is that more overseas buyers have been adopting the same search criteria in their choice of location as their UK counterparts, opting for London’s outer zones in the search for more space and affordability.

We have seen many buyers from Canada, the USA and Australia buy in the suburbs as long as the property is close to an overground railway line (not necessarily a tube line) where they can find a larger home with parking and a garden within their budget.  Even Hong Kong BNO passport holders moving to London for the first time are happy to consider properties in Zones 3 and 4 as they too prioritise space – both inside and out.

The return of foreign buyers could boost house prices by up to £134k

When overseas buyers return fully to investing in London property, property values are likely to increase.   We recently analysed Land Registry data to determine house price trends in London and the effect that travel restrictions had on activity from foreign buyers.  This enabled us to calculate that the return of foreign buyers could boost house prices by as much as £134,000 in some areas.   For more about this go to our press coverage page.

Can we help you?

As demand from buyers continues to outstrip the current supply of homes, we expect the housing market in London to remain strong.  For sellers, this remains an excellent time to put your property on the market due to pent up demand.  We are desperately short of good housing stock so if you are looking to sell, please contact our London sales team or one of our international offices for a an up to date free appraisal of your property.