15 August August Property Market Update
With many of our colleagues and clients enjoying their summer holidays, London is refreshingly quiet during August, with less traffic, more parking spaces and easy restaurant bookings!
It is also a time of year when we have many international visitors and we have certainly found an increase in international buyers looking for family homes and investment properties. In particular, we have seen a flurry of enquires from US investors and referrals from our partners in Keller Williams international offices. In 2008 the exchange rate was 2 US dollars to the pound, and with the current rate at 1.21 US coupled with a correction in prime central London (“PCL’) prices. Since the peak of the marketing in 2013, overseas buyers can achieve a saving of up to 50% on PCL prices.
Many international buyers are sensing this may be the time to purchase in London and take advantage of the current uncertain political climate. No one has a crystal ball, however it’s fair to say that the Brexit saga may be approaching its end game in the not too distant future.
Its Brexit and political uncertainty which is causing some buyers to sit on the fence and once there is clarity, we expect a more liquid property market.
There has been much speculation in the press around Boris Johnson’s announcement that he is looking at cutting stamp duty rates from 12% to 7% for the top band over £1.5 million and abolishing stamp duty under £500,000. All industry experts agree that this would be hugely positive for both the market and generating increased stamp duty receipts for HMRC which have fallen dramatically (6.3% over the last 12 months according to LCP).
The Summer 2019 report from Lonres makes interesting reading stating that the Prime Central London market has risen by 3% in sales in the second quarter of 2019 compares to Q2 in 2018.
Also, there has been a significant increase in transactions under £2 million and a 16% increase for properties over £5 million. The stickier part of the market is in the £2 – 5 million sector.
Click on the image below to view the full Lonres report.
The rental market appears strong and for the first time in a long while we are seeing speculative opportunities for investors to lock in newly refurbished developer stock at rental yields at 4%+ per annum (against a long term average of nearer 3%).
If you would like any advice on property values or considering a move, please feel free to contact us.
Alternatively, you can check out our free valuation calculator here: http://valuation.waltonestates.co.uk/