The View From The Capital
As I look back over the last year, I am reminded of how strong the residential property market has been.
Any fears that the end of the stamp duty holiday would bring about an abrupt end to the buoyant residential housing market last autumn was well and truly put to bed over the winter. Not only did the market maintain momentum, but it continued to shift through the gears during what is usually a quieter period in the year. This carried on into 2022 but the exceptional demand led to a shortage of stock and that remains the main story today. The imbalance has continued to put upward pressure on prices despite the increasing pressure on household finances and the six, albeit relatively small, increases in interest rates from a historic low. There is clear anecdotal evidence that many purchasers have factored these into their thought process. Although supply is easing, the fundamental issue remains – too many buyers are chasing too few properties.
In the previous edition of this magazine, we reported that we had seen an extraordinary 39% increase in London-based applicants registering to move out of the Capital year on year. This demand has continued, albeit at a slower rate. The much mentioned ‘dash to the country’ has become a more ‘sedate jog’ as purchasers seek more space both internally and externally. We have also noticed a tangible shift, as purchasers increasingly make their country home their primary residence, rather than considering it as a second home for occasional use. Now with the return to office life, some people are choosing hybrid working – splitting their time between their London workplace and their home offices. This has led to increased demand from London buyers for Prime properties in Surrey.
At our office in St James’s, we provide professional, qualified staff to discuss potential purchasers’ requirements, answering their questions about broadband speeds, prices, market conditions, commute times and schools, and providing them with brochures for suitable properties. Our annual London and Country Property Show has proved a valuable opportunity for prospective London purchasers and investors to speak face to face with local agents such as Curchods Prime.
Despite the exodus from London, the demand for London properties has remained strong for larger flats or homes with outside space. Apartments without external space are experiencing a steady comeback as demand increases. This is driven by professionals returning to the office, and from those realising a long commute isn’t their cup of tea. Whilst prices remained fairly static during the pandemic, compared to the country market, they have surged in the first half of this year. This is most noticeable in the top-end of the market (above £5m+) with prices achieved in the Prime London area just a few percentage points off their peak in 2014. Overseas buyers have re-appeared adding competition in the Prime central and fringe markets. In particular, Americans are taking advantage of the strong dollar/weaker pound. London has lost little of its lustre and it remains one of the world’s most attractive cities to invest, live and work in.