London Property Market Update: July 2020
The property market is coming back to life. Our diary is full with viewings again and we are submitting offers on behalf of clients on a weekly basis.
We are still in early stages of the post-lockdown housing market but here are our initial thoughts.
A Fragmented Market
There is a wide range of sentiment from both buyers and sellers. We are finding common ground on some purchases but not all. In a quickly changing market, it’s important that buyers are patient and more opportunities are likely to present themselves towards the Autumn.
In the current circumstances, different types of property are also faring very differently. On one hand, competition for best-in-class properties on prime residential streets (especially with sizeable gardens or terraces) is strong. We have seen one property with a very large garden attract multiple offers above asking price.
On the other hand, significant discounts can be achieved on new-build flats, especially in residential towers. There are good opportunities for investors looking to make bulk purchases, particularly if they are buying 6 or more units and thereby avoiding residential stamp duty rates.
A buying agent can play a vital role in navigating what is becoming an increasingly complex market. A great deal of our time is spent matching buyers with not just the right properties, but the right vendors who are also looking to promptly exchange contracts. We foresee the market will continue to be fragmented for the remainder of 2019 as more economic news starts to filter through.
Beware Rising Asking Prices
Rightmove has reported asking prices have risen to an all-time high. We have noticed properties which failed to sell throughout 2019 relisting at significantly higher prices – sometimes up to 10% higher. This may be a ploy to let buyers achieve an impressive sounding discount while the vendor secures the figure they want. As always, an asking price should never guide an offer.
SDLT Relief – Tread with caution
The government’s announcement to reduce stamp duty for all purchases up to £500,000 has certainly boosted activity at the lower end of the market. Until March 31st 2021 there will be no basic rate of SDLT up to the value of £500,000. Whether this translates into more completed sales remains to be seen.
The full economic impact of coronavirus is yet to be seen and we suggest buyers do not place too much importance on this temporary relief. This is especially true in the central London market where the £500,000 relief typically covers a smaller amount of the final sale price. Buyers should focus on achieving an appropriate discount to reflect the current situation.
Strong Demand from Hong Kong
The Financial Times reports that the number of Hong Kongese looking to buy in London is increasing in the wake of political instability in the region. This certainly reflects our experience and we are currently working with several clients looking to buy remotely. The British Government’s recent announcement to provide a path to citizenship to all BNO holders, favourable exchange rates and the relative affordability of London property are all driving interest.
If you are looking for assistance with your property search, please get in touch today on 0208 0880 0552 or [email protected] We would be delighted to discuss what we are seeing in the market on a daily basis.