13 March March Market Overview – A Flat Market awaiting a Spring Bounce
At Walton Estates, we have seen an encouraging start to the year. Viewing activity has increased with several of our properties going under offer including a penthouse in Islington at over £3 million, a flat in Pimlico and a three bed flat in Chelsea. Other properties which have been on the market for some time are now attracting good offers and, in some cases, even competitive bidding.
Recent statistics would suggest that we are in fact in a flat market, with little panic or movement on either end. This looks set to remain the case for the foreseeable future unless an international spring bounce sparks a bump in the market. According the independent Data research company Lonres, the following are some highlight facts and figures in relation to Prime Central London broadly comprising Knightsbridge, Belgravia, Mayfair, and Kensington & Chelsea (in the SW1, SW3, SW5, SW7, SW10, W1 and W8 postcodes).
- In the 4th quarter of 2016 stock levels are up by 7%.
- Prices in 2017 down 1 percent year on year and 2.1 percent on the 4th quarter 2016
- Achieved prices for homes under £2 million fell annually by 2.7% compared with 0.3% for homes over £2 million showing a clear two-tier market
- £51psf is the average rental value in prime central London (i.e. the annual rent divided by the square footage of the property)
- 2.93% is the average rental yield
- £765 is the average rental achieved
- HMRC recorded record stamp duty revenues of 9 billion in 2017 suggesting a far stronger property market than many have predicted
- The average UK house price was approximately £226.000 in November 2017
Brexit uncertainty is probably the biggest factor in ensuring buyers remain cautious entering the market, followed closely by the cost of stamp duty when moving. Stamp duty costs are being absorbed into the market either by adjusted selling prices and/or discounted offers. Buyers looking to secure discounts of more than 5-10% on asking prices are set to be disappointed. Low interest rates mean that approximately 50% of prime central London property owners and wealthy international buyers are sitting on substantial equity after strong growth over the last decade, despite the recent market correction, there is this little panic in the market.
According to the National Nationwide House Price Index, in January there was an unexpected pick up in house price growth to 3.2% with a month & month increase of 0.6%.
For the time being the market is relatively stable and buyers are able to achieve good value for money where vendors can achieve sales where they have priced their properties realistically. Sterling is over 6% cheaper than before the June 2016 vote, which makes UK property attractive to international buyers. No doubt it’s a buyer’s market. However, the level of transactions is encouraging.
For a confidential market appraisal or a general chat about the market, please feel free to call me on 0788 764 4929.