The past year of the London Property Sales Market has been very interesting, something I have constantly kept track of. I have worked within the Property Recruitment industry for almost 5 years and this past year has been particularly different to previous years!
In my last blog, So Happy My Offer Has Been Accepted! But Oh Wait, The Dreaded Stamp Duty… I discussed the effect the increased Stamp Duty was having on first-time buyers and the London property market and whether it was even an issue for the most affluent?
Is everyone moving from Zone 1? Is it a boycott of Prime Central London!? PCL has been a location desired by many, I personally have always aspired to live in areas such as Kensington, Notting Hill, and Chelsea – if I could afford to move to the beautiful South Kensington or calm Little Venice I definitely would. But has that Hot Spot changed for potential buyers? Is it now the purchasers that are filtering from the Centre to what was known before as the ‘dreaded’ Zones 3-6. The Evening Standard has stated the largest drop in property prices has been in the Central Boroughs such as Camden (down 16.4%) and Hammersmith & Fulham (down 11.6%). The borough with the most increased growth has been Hackney with an increase of 15.6% and Bromley (even further out I know) has had a rise of 11.6%.
Data firm LonRes have also stated the number of houses over £1m sold in 2016 were down 21% year on year. City A.M reported London’s house growth is level with Portsmouth… Hometrack has stated prices in PCL are just becoming unaffordable, in Chelsea house prices have fallen by 10%. Savills concurred that the prices of PCL have fallen by 6.9% compared with last year (which was 4.9%). However, the real estate firm has said within the collapse of Sales (Brexit and increased Stamp Duty) the asking prices of properties have had to reflect this. Is this all doom and gloom? It was predicted that the fall in PCL would be 9% – so it is actually less than anticipated.
(Source from Knight Frank)
Even though Savills have reported lower prices, Persimmon has stated a rise in revenue (their average selling price was up by 4%) as the availability of mortgages have helped to boost prices!
More and more buyers are now buying New Homes which seems to be a strong choice for buyers. New Homes are competitive with mortgage offers and therefore makes the purchase very affordable (I recently bought a new home myself!). The FTSE 100 in January showed the builder was the best performer with share up by 5%.
Richard Donnell of LonRes has shared that house prices in London are 85% higher than they were in 2009!!! – so it is not surprising the pace has decreased. Helen Cahill of City A.M has said the slump in the prices are at the top end due to Stamp Duty on homes worth more than £1m and has meant that some homes have slashed their prices by 30% – it is all to do with affordability. Are buyers simply not able to physically pay the price for PCL?
But will it all be over soon?
Or will it be a case of Zone 1 buyers fleeing to the likes of Bromley? Or the up and coming Hackney? As the Sales Market changes so do consumers.
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