What’s happening in the London property sales market – September 2021

The June 30 Stamp Duty deadline created something of a mini feeding frenzy as buyers rushed to complete on their property purchases, but as the dust has now settled, we can look ahead to the autumn months with a sense of realism and clarity.  Typical of the holiday season, there has been a recent decrease in buying activity, but we share the predictions of many experts, that this is just the calm before a renewed storm of transactions that will firmly pick-up again in the run up to Christmas.

Scarcity of available property boosts market prices 

Across the UK, demand is up 20.5% on this time last year, while at the same time, availability of stock is down 26%. Combine this with the higher loan-to-value mortgages, available for first time buyers and you get a nationwide bump that has the average UK house valued at £266,000. There is no sign of a slowdown just yet as overall price increases are holding steady at just over 6%, but it is also the speed of these transactions that is unprecedented: the time it has taken to sell a property almost halved over the last two years. In 2019, the average transaction took 49 days; in June it was 26. Admittedly, much of this would have been buyers clambering to get their properties within the stamp duty relief deadline and it’s clear that fortune favours the brave!  However, as the conveyancing process recovers from ‘burn-out’, there is a now a large back-log to be cleared and completions will take some time to return to normal averages of 12-16 weeks and buyers need to plan for this.

As always, it’s London that acts as the main driver of these upward trajectories. Remember the heady days back in 2016 when the average property price in the rest of the UK was under half (47%) that of the Capital? Well, that percentage has risen due to buyers being priced out to the Home Counties and greater London suburbs, but it’s still only 54% and is nowhere near the 70% that it was in 2005. For overseas investors who are now returning to the market, London remains the touchstone for capital growth and appreciation, buying here continues to provide good long-term gains.

London council leads the way out of the pandemic

London also serves as an indicator of how businesses are shaping their post-lockdown strategies. Westminster Council’s decision to allow traffic back into the Soho district of the West End is seen by many as a sign of things to come. Although many famous restaurants had put pedestrianised streets to good use during the pandemic, with plenty of space for al fresco dining, the local authorities are now gearing up for increased commercial traffic as local businesses recall their respective workforces to back to their offices.

Hybrid working

Still, it is clear that the work from home phenomenon is here to stay in some shape or form and professionals will be expecting to carry out many tasks from the comfort of their recently customised ‘home’ offices. Domestic buyers are making their presence felt in an area previously dominated by overseas investors, which has resulted in an uptick in demand for flats and cheaper stock. Apart from the leisure facilities that come with most new property developments, many buyers still have outside space top of their wish-list. This means that being located close to a local park is now a key factor most likely to trigger a sale.  Beaufort Park in Colindale NW9 is a good example. It’s zone 4 location and parkland surroundings make it a convenient commuter option and relatively affordable. But with prices climbing in London’s fringe areas by as much as 5% since the beginning of July, our branch on-site at the development is already seeing competition for the best units and could do with more stock.

The situation with the Prime zone 1 London market remains that of “wait and see”. Buyers are still holding off at the moment, but with plenty of liquidity around due to Covid-induced savings, there is potential for increased activity when international travel fully opens up again.  Saying this, we have seen interest pick up strongly in the City and Nine Elms areas, with one Dubai-based client buying 12 flats across 2 schemes respectively as developers continue to offer good discounts to those who have the finance in place.

Resale properties remain a cost-effective way to buy into Central London 

The private rental market took the brunt of the pandemic-induced slowdown as corporate professionals weren’t able to travel and students stayed away. But it has since picked up strongly with rents edging back up to pre-Covid levels and it stands to benefit immediately from any relaxation of travel restrictions. And this also applies to investment enquiries from overseas buyers. Of course, virtual tours have proved phenomenally popular over the last twenty months and overseas investors have always bought off-plan, but those who can travel are now coming to view second-hand properties.

Resale properties (aka reassignment property) come in the shape of 2-4 year-old apartments that are part of new-build property developments located in zones 1-4 on the Tube map. Overseas buyers are looking for properties that are still in good condition and come with a strong rental performance history such as Imperial Wharf, a new-build scheme in Fulham where we have had an office on-site since 2008.  After a bit of a lull over the summer, enquiries are rising again and we have just received very good offers on two units to international buyers looking for rental investment properties.

Green space proves to be a big selling point in North West London

When people talk about the lasting effects of, what can only be described as, a generation-defining health crisis, they tend to focus on gloomy economic forecasts and infrastructural challenges, but there are some interesting upsides. One standout trend has been a revaluation of the importance of parks and gardens which is reflected in the types of properties that are now becoming available. We have a good spread of stock coming onto our sales register soon, across the price points, these are properties for sale from £600k – £1m in outer prime locations Hampstead and Belsize Park and their fringes. We’re also taking instructions in West Hampstead, Childs Hill and Kilburn where good quality accommodation exists at cheaper price points.  All have a common denominator and that is their access or proximity to lush green space.

The message is clear from registrants: “if we’re working from home, we need our surroundings to be as relaxed and as aesthetically pleasing as possible”. This sentiment is illustrated by a conversion apartment we just sold in South End Road NW3 which sold quickly because it is literally right opposite the Heath.  We also sold a 3-bedroom apartment in Hampstead Lane Highgate in two-thirds of the time it would have normally taken, mainly because it had a terrace. This kind of demand is also galvanizing the market in neighbouring Dartmouth Park where we really need stock to meet demand.

We are always on the lookout for more stock, so if you are considering selling your property in Hampstead or Highgate, please contact our Hampstead Sales branch to arrange a free market appraisal of your property.

Read more comment from Benham and Reeves in the national press

Want to know more about the London residential property market? Then don’t miss our regular contributions in the national press as seen in the press and media coverage area on our website.  Our director Marc Von Grundherr provides expert analysis of the latest property news in the form of insightful interviews with many of the popular newspapers and international media. In his most recent contribution in The Sun newspaper, Marc gives pointed advice to any potential buyers who might be considering holding off until the market cools.