Prime Central London

Coronavirus和倫敦房產市場

Coronavirus和倫敦房產市場

生命的危機,無疑的,是我們面對Coronavirus最首要的議題。同時間,我們想就這疫情對於倫敦房地產短期和長期影響,給予最初的看法。

現在,客戶比以往任何時候都需要得到市場誠實的評估建議。Perrygate將繼續總結買房的潛在好處與壞處,並幫物客戶得到最好的交易。

疫情爆發以前的市場?

今年整個一月和二月,人們購買信心和活動都在恢復。大選結果使得很多人更有信心去購買。且多數人認為,脫歐的不確定性,也早已體現在房價上。年初,大家重新回到市場上,爭著出價,買“同類房產最好的”房子。

很保守的說,情況不再如此!

現在呢?

房地產市場,基本上是停滯不前。 房仲們不到現場陪看房,屋主以及物業估算師也不能到現場評估房子。我們手上一些要購買房子的客戶,在封城以前,律師已在處理,也開始了物業估算及貸款流程。我們還在等待合同簽署,但我們的客戶掌握所有的過程。

封城導致的其中一個問題,大量的Airbnb轉移到一般租賃市場。這導致短期的租賃市場降價,然而是否能看房,又是另一個問題了。

COVID-19是否已經影響房價了呢?

因為封城,COVID-10對於房價的影響微乎其微 – 沒有足夠的交易量,來對市場價格進行有效評估。這情形會持續到有大量交易數據之前為。止。

房地產是一種流動性很差的資產,並且房價不受金融市場日常波動的影響。 市場重新開啟後,就會出現一段“價格發現”的時期,因為買賣雙方試圖定位什麼是公平價格。 銀行還將重新評估可接受的風險水平。 我們預計這情形將在封城後幾個月發生,而影響到交易量。  

房價將會有什麼變化呢?

簡而言之,沒人知道COVID-19將對經濟造成何種程度的損害以及對市場的後續影響。 社會會不會要在漫長等待疫苗研發後才能恢復正常?還是會隨著抗毒藥物和免疫測試後,而漸漸改善?中央銀行將為了經濟注入多少資金?政府給予”印花稅假期“來保護房價嗎?

雖然這麼多的不確定,我們提出主觀對於2020年倫敦房地產市場的看法。

     潛在的不利因素:

  • 高失業率、公司降薪 – 這可能會導致房租收益降低,這會對給予賣房的屋主,降價壓力。
  • 不確定的貸款環境 – 銀行是否會實施更嚴格的還款能力審查,或是更保守的估值。 
  • 疫情造成經濟上巨大的損失,商業活動像是被按了暫停鍵。
  • 世界從病毒攻擊狀態下恢復中,未來還會造成很多經濟損失 – IMF和其他有聲望的機構都預測,這將會是華爾街大蕭條後,最慘重的經濟損失。即使是最好的情況,經濟損失也很可觀。若套用V-shaped recovery理論看起來也過於樂觀。
  • 政府為了償還債務,潛在所得稅的增收。
  • 更高的死亡率、離婚率和個人債務,會增加使賣房動機增加。

     潛在有利因素:

  • 英行降息,史上最低利率,並且短期間不太有機會提升。 
  • 貸款假期可以減輕房東和房主立即的經濟壓力。
  • 在倫敦精華市中心的的區域,大部分的自助屋主並沒有很高的負債比例,或是完全沒有貸款。這樣預期可以降低拋售房子的賣家人數。
  • 在不確定的貸款環境下,只需貸款60%以下的買家甚至不需貸款的買家,很有可能有商議空間跟前幾年比較來,更高。
  • 海外買家可以從英鎊的匯率獲益。英鎊現在對美金是1:1.26
若這些綜合因素加總,並且以2020年2月的市場價格為基礎,當市場中心開啟時,我們可以看到,2020年,不利因素是多於有利因素的。即使賣屋的人減少,買家還是佔上風。但是屋主和賣屋房仲需要一些時間,才能理解這一點。

我想在倫敦買房,該牢記什麼呢?

封城後,我們認為買家需要要求房屋更多折扣,以反映額外的風險。

現在已比以往更重要的事,任何購買都應至少持有房產五年。在當前的不確定因素下,這使得支付兩次印花稅,顯得更沒意義。尤其如果您是希望避免在2021年4月提高SDTD的海外買家。

現在利率在歷史新點,也因此獲得資金比以往都便宜。許多人會趁著市場不活絡的時候,買到他們夢想中的房子,並得到長期固定利率貸款。

我們將竭盡全力,以最優惠的價格,替客戶買到房子。買家應該以長遠的眼光來看2020及之後的房價走向。歷史上來說,倫敦市中心一直都是最安全的投資地,其中之一。

現在比以往任何時候都重要,我們相信我們六個月的合同期限,給予客戶足夠的時間,去評估市場和採取相應行動。

確定的是,2020年和2021年將有極好的購買的機會。買家擁有談判的優勢。向以往一樣,關鍵是,找到對的房子並且賣屋意願高的賣家。

Perrygate is not a financial advisor and anyone considering purchasing UK property must undertake their own due diligence. The opinions expressed in this and other articles are the personal opinions of staff at Perrygate and are not investment advice. The value of an investment may go up or down. Please see our Terms of Use  for more information.Whome

Prime Central London

Coronavirus and the London Property Market

CORONAVIRUS & LONDON's PROPERTY MARKET

Published 24th March 2020

Whilst the coronavirus pandemic is a human crisis first and foremost, it would be amiss to not give our initial thoughts on the short and longer term implications for London’s property market. 

Now more than ever, clients need an honest assessment of the market.  Perrygate will continue to outline both the potential up and downside of any purchase and help our clients achieve the best possible terms. 

What was happening to the market before the pandemic? 

Confidence and activity were returning throughout January and February.  The general election result gave many the confidence to proceed with their purchase and the majority thought ongoing uncertainty surrounding Brexit negotiations was ‘priced in’. Competitive bidding and sealed bids were making a return for ‘best in class’ properties.

It’s safe to say, that’s no longer the case! 

And Now? 

The property market has come to a virtual stand still. Estate agents aren’t conducting viewings whilst lenders and surveyors are not carrying out valuations in person. 

We have some client purchases in the hands of solicitors which made it beyond the surveying and financing stages before lockdown. We are progressing these sales towards exchange of contracts with our clients in control of the process. 

One side effect of the lockdown is Airbnb properties flooding the regular rental market. This is causing a short-term decline in rental asking prices but whether you can carry out a viewing is another question entirely. 

Has COVID-19 already affected house prices? 

Due to the lockdown, the impact of COVID-19 is minimal – there are nowhere near enough transactions to make a valid assessment of the market. This will remain the case until we start seeing significant transactional data coming through. 

Property is an illiquid asset and house prices are not subject to the day to day swings of the financial markets. Once the market reopens, there will be a period of ‘price discovery’ as buyers and vendors try to establish what is a fair price. Banks will also reevaluate what is an acceptable level of risk.  We expect this to suppress transaction volumes for the first few months after lockdown.  

What will happen to house prices?

In short, nobody knows the extent of the economic damage COVID-19 will cause and the subsequent effect on the market. Will society only return to normal following a long wait for a vaccine or will things improve gradually with the introduction of anti-viral drugs and immunity tests? How much money will central banks inject into the economy? Will the government introduce a SDLT holiday to protect house prices? 

With that said, here is our personal take on London’s property market in 2020. 

     Potential Downside: 

  • higher unemployment levels / firms reducing salaries – this could lower yields which put downward pressure on prices 
  • an uncertain lending environment – will banks impose stricter affordability checks and be more conservative in their valuations? 
  • economic losses from the ongoing lockdown
  • future losses to the economy as the world recovers from the virus – the IMF and other respected bodies are predicting the worst economic downturn since The Great Depression. Even in a best case scenario, the economic impact will be significant and talk of a V-shaped recovery seems optimistic. 
  • potentially higher income tax rates as the government looks to address higher debt levels
  • higher death rates, divorce rates and personal debt which will all increase the number of motivated sellers

     Potential Upside:

  • historically low interest rates unlikely to increase in the short-term 
  • mortgage holidays alleviate immediate pressure on landlords and homeowners
  • the majority of homeowners in prime central London are not heavily leveraged or own their property outright so we expect this to limit the number of distressed sellers
  • in an uncertain lending environment, cash buyers or those looking to buy at a maximum 60% LTV will likely find they have more negotiation leverage than in previous years. 
  • overseas buyers can benefit from favourable exchange rates against the £.  Pound sterling is currently trading at $1.25 USD
If we weigh up all the above and assume asking prices will be at February 2020 levels when the market reopens, we see more downside than upside throughout the rest of the year. Even if there is limited available stock, we believe buyers will have the upper-hand. It will likely take the majority of vendors and selling agents a while to come round to this view.  

What should I bear in mind if I’m looking to buy in London? 

After the lockdown, we believe buyers should be looking to secure a discount to reflect the additional risk.

Now more than ever, any purchase should be made with a time horizon of at least 5 years. With the current uncertainty, it makes even less sense to be paying SDLT twice – especially if you are an overseas buyer looking to avoid the SDLT increase in April 2021. 

Interest rates are now at historic lows and accessing capital is cheaper than ever. Many will see a softer market as an opportunity to secure their dream home on a long fixed-rate mortgage. 

We will work our hardest to secure any property for the best price and buyers should be taking a long-term view of how their investment will perform throughout the 2020s, not 2020! Historically, central London property has always been one of the safest investment classes with strong capital appreciation. 

Now more than ever, we believe our 6 month retainer period gives clients time to assess the market and act accordingly.

There will certainly be excellent buying opportunities in 2020 and 2021 where buyers will have significant negotiation leverage. As ever, finding the right property and motivated vendors will be key. 

If you would like to discuss a future or ongoing property purchase in London, please get in touch with us today for a free consultation. 

Perrygate is a registered buying agent and not a financial advisor. Anyone considering purchasing UK property must undertake their own due diligence. The opinions expressed in this and other articles are the personal opinions of staff at Perrygate and do not constitute investment advice. The value of an investment may go up or down. Please see our Terms of Use  for more information

Up and coming areas in London

January Market Recap: Market Liftoff?

January Market RECAP: MARKET LIFTOFF?

In our 2020 predictions for the London market last month we wrote:

“On balance, we would be very surprised if the Spring market is not significantly busier than 12 months earlier.” 

This is already proving to be the case and the market is springing back to life again with vendors and buyers returning in numbers. Since Lara and I founded Perrygate in late 2018, December and January have been our two busiest months. The election result has released significant pent up demand which has been gradually building over the last three years.  Domestic and international buyers we are working with feel London now represents real value compared to other global cities and that the ongoing uncertainty surrounding Brexit negotiations is ‘priced in’.   As a boutique family buying agency who only works with a select number of clients, we even took the decision to close our lettings service to meet growing demand from buying clients and make the business offering even more focused. 

Whilst we are bullish on market activity, we are still taking a wait and see approach regarding the direction of achieved sold prices. According to Rightmove’s London Index, asking prices in greater London increased by 2.1% in January – the largest ever recorded increase for this time of the year. There is a danger that the gap between buyer and vendor expectations may widen in some cases.  Based on our recent observations and negotiations in the market, sales are being agreed at sensible prices and there is room for negotiation. For those looking to move before the Spring, there has been a welcomed 19% increase in sales compared to a year ago. 

We are certainly not offering more for properties compared to in 2019 but our clients now have greater choice – albeit with increasing competition! 

If you would like to discuss your property search with Perrygate, email us at [email protected] or call 0208 0880 522.

Is now a good time to buy in London

2020 Property Predictions

London Property PREDICTIONS 2020

2019 was as a year of political and economic uncertainty causing low transactions and limited housing stock. Are we in for more of the same in 2020? 

Perrygate is not expecting dramatic changes this year but we are looking forward to a busier market than 2019 with more buyers and sellers taking action. 

Here are some of our key predictions for buying property in central London in 2020.

Less political uncertainty means a modest increase in housing stock. 

Throughout 2019, many of our clients feared a Corbyn government even more than a potential hard Brexit. Proposed hard-left policies including seizing 10% of publicly listed companies and forcing private landlords to sell to tenants understandably caused concern. The Conservative’s overwhelming December election victory has prevented this worst case scenario and provides the certainty that they are set to govern until at least 2025. For many international buyers already benefiting from favourable exchange rates, this election result was enough to complete on purchases or start searches this year with an eye to quickly exchange contracts. 

Of course the election result is just one factor to unlocking the slow market. Brexit is a far more complex process which will continue to cause uncertainty throughout 2020 – but hopefully to a lesser extent than last year.  Although the UK is set to leave the EU by the end of this month, we expect many domestic buyers and vendors to remain on the sidelines whilst the post-Brexit economy takes shape. 

On balance, we would be very surprised if the Spring market is not significantly busier than 12 months earlier. Stable low-interest rates combined combined with current wage growth will see more buyers come out of hiding. 

Best-in-class properties to continue to sell quickly. Organisation is key. 

The top 10% of any property type (whether that be a Kensington mews or a 1 bed flat in Notting Hill) are not staying on the market for long – if they are reasonably priced inline with recent sold prices (not asking prices!). Competing bids at this end of the market are still common and giving the estate agent/vendor the security of working with a serious buyer can make all the difference. On several occasions in 2019,  our retained clients secured a property partly because they were well-organised and financing/surveyor/solicitor were in place before an offer was made. 

In a quieter market, off market has a key role. 

Whilst we expect the market to pick-up this year we are still expecting lower than average transaction figures. This means off market listings will remain important for buyers – particularly for purchases above £2m in prime central London. Prime vendors do not want the time their property is taking to sell and every price reduction detailed on Rightmove. There will be more vendors leaving details behind estate agent desks looking to be matched with discreet, organised buyers.

Off plan and new builds present opportunities.

We have previously covered issues with London’s off plan market but feel there are now opportunities. Towards the end of 2019, we negotiated discounts on off plan property in central areas up to 15% – delivering a very competitive price per square foot. Many developers have quarterly financial targets and cashflow pressures so there are opportunities to secure a fair price. Due diligence in off plan is vitally important, especially where there are limited direct comparables and high service charges have to be factored into the overall value.  Many off plan listings are still wildly overpriced however. We were recently quoted £5m for a fairly uninspiring 3 bedroom flat in one development which we would have struggled to value at half that amount. Some developers are still trying to market such schemes to overseas buyers and take advantage of a lack of local knowledge. 

Looming tax changes for international buyers.

The upcoming Conservative budget may bring a further stamp duty tax for non-UK tax resident buyers. The policy was announced in November but there is only limited detail at this stage. If this policy comes into effect later this year it is unclear what impact it will have on London’s prime housing market where international buyers are very active. We are working with some buyers looking to achieve quick exchanges before this potential tax change plays out.

At a time where buyer ands seller expectations are often very different, a buying agent can play a key role representing their client and helping them achieve a fair price for the right property and crucially, getting a sale over the line. 

If you are planning to buy a property in London in 2020 and would like to discuss your search with us? Please get in touch. 

Perrygate is not a financial advisor and anyone considering purchasing UK property must undertake their own due diligence. The opinions expressed in this and other articles are the personal opinions of staff at Perrygate and are not investment advice. The value of an investment may go up or down. Please see our Terms of Use  for more information.

Up and coming areas in London

Up and Coming Areas in London

Whilst many of our clients favour more traditional prime central London areas, others always have an eye out for the next ‘Clerkenwell’ or ‘Whitechapel’.

Predicting the next ‘hot’ area is not an exact science but here are five places we expect to perform strongly over the next decade. Some of these neighbourhoods don’t have the best of reputations whilst others are well established but we see them all going from strength to strength.

For more London areas with investment potential, take a look at our article on Place to Invest in London.

Acton

Compared to its more expensive West London neighbour Chiswick, Acton offers excellent value to first-time buyers even if it’s a little rough around the edges. The area is already well connected on The Central Line and Acton Main Line will be next to Paddington and Bond Street on the Crossrail route. 

Ealing Council are knocking down the huge post-war South Acton Estate and replacing it with the £600m South Acton Gardens scheme – one of the biggest regeneration projects in the capital which will deliver over 1500 homes and other amenities.

Buying Tip: There are still good value properties in easy walking distance of Acton Mainline’s Crossrail station – buyers focusing on refurbishing old housing stock could see a significant uplift over the next few years.

Battersea 

Home to the landmark billion pound Battersea Power Station and Nine Elms  developments which will not only bring luxury homes to the area but a strong mix of retail and leisure space. The Northern Line extension will finally connect SW11 to the tube with two new stations opening in 2020. Battersea is just a short walk across The Thames from upmarket Chelsea and we wouldn’t be surprised if the pricing gap between the two narrows in the coming years. 

Buying Tip: Focus on existing period property – especially sizeable mansion block flats in the areas bordering Battersea and central Wandsworth. Some of these properties are trading at significantly lower prices than 12 months ago whilst the new builds grab all the headlines. 

Poplar

Situated just north of Canary Wharf , regeneration schemes are in place to make the two areas better connected. With Canary Wharf’s working population exceeding even The City of London, the area will appeal to staff looking for an easy commute. 

Buying Tip: Roads like Woodstock Terrace have flats in well maintained Georgian terraces within 15 minutes walking distance of Canary Wharf at around the £500,000 mark.

Ealing 

Probably the most established neighbourhood on our list. Ealing has been a long-standing favourite amongst families due to its large suburban homes, excellent schools and parks. Although it is quite a distance from central London, the arrival of two Crossrail stations will actually make the area better connected to many key commuting areas than many more central neighbourhoods . A journey from Ealing Broadway to Tottenham Court Road will only take 12 minutes and residents will even be able to go from (far) West London to Whitechapel in the East in just 20 minutes. 

ffffThe council and major developers like British Land are partnering on major new schemes and regenerating the high street. 

Buying Tip:  Treelined roads such as Woodville Road have fantastic period properties and are relatively peaceful despite being less than 10 minutes from Ealing Broadway Station. Prices per square foot are very competitive compared to more central areas. 

South Kilburn 

Situated near Maida Vale and within walking distance of Hampstead- South Kilburn is an area primed for further growth. A 15 year masterplan is underway for the area which will include improvements to public realm, new schools, a large urban park and 2,400 new homes. 

Buying Tip: The South Kilburn Masterplan is available online. Buyers looking to benefit from the uplift in the area without waiting for the developments to complete can focus on properties on the periphery of the masterplan.

Perrygate is not a financial advisor and anyone considering purchasing UK property must undertake their own due diligence. The opinions expressed in this and other articles are the personal opinions of staff at Perrygate and are not investment advice. The value of an investment may go up or down. Please see our Terms of Use  for more information.