Market comment Summer Market 2011
When scrutinising the current financial climate and the delicate balance that we have to attain economic recovery, it is hard to appreciate that we could have ever foreseen that prime residential London property prices could still be on the upward curve. However, they are and what’s more are continuing upwards on a monthly basis!!
Estate agents all confirm that prime residential property in London is in hot demand. We agree, and continually see that much of this demand is being driven from the overseas investment sector. The lack of quality stock, cheaper sterling, along with frustrated domestic and overseas purchasers being more aggressive in their bids to win a property, is making it hard to realistically think that this cycle will not continue well into the next quarter of this year.
This type of market has been seen before but restricted to certain types and values of property at any one time. However, this year so far we have seen the severe shortage of stock is affecting the market across the spectrum as owner occupiers struggle to find their next onward move, and investors hold on to their stock for long term growth. Leading agents have now reported a sharp rise in the volume of sales in their first quarter of this year compared to 2010, some even confirming as much as a 47% increase in some areas.
Whilst on the face of it this may deter some purchasers, especially in the local domestic sector, others will and should see this as a good opportunity to be involved. The simple reason is that investors are starting to enjoy higher yields in existing investments, 3.5% to 4% net and higher, as rental values have been increasing at a fast rate (as much as 20% in some areas) whilst also seeing appreciating capital growth. In our view it is crucial, that whilst London continues to shun the trend of the rest of the country, that good advice and representation is sought to allow access to precious new stock and more importantly securing it amid fierce competition. It can be very easy to get carried away in bidding wars and against heavy competition but equally fall throughs are becoming more common now as when the date of exchange looms, buyers suddenly realise they may be paying a high price for their property. It is key therefore to have cool headed advice to ensure that this does not happen.
If you are relocating or investing in the London, we can help you find the perfect property.
Read More >
