Now that the summer is behind us, will sellers’ and buyers’ mindsets find
a simpatic equilibrium?
Taking the pulse of the sales market in central London.
In our opinion, despite interest rates being at the highest level since 2006, there is a shift in sentiment taking place. Its faint, to push the pulse metaphor, but its beating.
The news that the economy has been stealthily doing better than expected, and the likelihood that interest rate rises have peaked, means that while affordability is still a major issue, the mood is gravitating from impending doom, to mild improvement. However, oil prices are on the rise and the cost of living is still extortionate, but Keir Starmer’s Labour government-in-waiting is shifting ever to the right of the left, and centrism is good for business. If he avoids preaching to the left about taxing the rich, we may avoid a year of fence sitting, as electioneering hits the headlines. Also, the
Conservative party has hardly been a shining light for the property market. It is our prediction that the sales market in central London will be steady and transaction numbers will improve moderately into 2024, while prices will remain in low single digit
reductions. In outer London, transactions will continue to struggle due to affordability issues. Buyers are coming to terms with what they can really afford, but it makes moving less appealing.
Are buyers still in the driving seat?
Basically yes. Apart from affordability there hasn’t been a better time to get a good deal on a purchase. In central London there are a very high number of cash buyers, who are unaffected by mortgage rates. The cash buyer is in a very strong position, as they always have been, but now even more so.
Some reports put the amount of cash buyers in PCL at 50%. That means that prices hold much more than where buyers need to borrow. However PCL is not immune from market sentiment and buyers who are able to buy with cash, are also likely to be business minded or well advised. They will want a deal in exchange for their speed and proceedability.
Buyers who borrow, are being means tested at extraordinary levels, and some are finding it hard to secure a rate with confidence that it will remain the same when the time comes to buy. So a buyer who is approved by a lender and who has secured a rate, is likely to be motivated to move as quickly as possible, and is also likely to be serious. Those buying now, are buying for a reason.
Cash buyers are also being incredibly diligent, with fewer taking a view on issues found during conveyancing. They know they can take their time in the current climate. Buyers and sellers are increasingly frustrated at the length of time the process takes to completion. New levels of ineffectiveness have been reached in a process screaming for modernisation and reform. The summer holidays haven’t helped and we can’t help thinking some of the reports citing a lack of transactions, is due to the sheer amount of time wasted waiting for lenders, freeholders, managing agents, councils and the like responding to enquiries.
Will the Lettings market continue to be so plagued by imbalance?
It will come as a relief to tenants that the imbalance of available stock and the consequential price increases are easing, as more properties come to the market and competition eases. Prices increased by almost 30% but this has now slowed down.
Most landlords have not benefited from the rise in rental income as their own costs have
rocketed from buy to let rates, and increasingly less tax benefits available. Another Conservative party gift. Landlords are still minded to sell assets that they might once have considered holding until retirement. This will continue to impact the private rented sector and will not benefit tenants. The properties coming to the market now are often because a seller has been unable to sell at a desired level and hence has taken the decision to hold the asset until the sales market makes more of a robust come back. The build to rent sector continues to grow, with commercial landlords taking advantage of London’s housing shortage and while development of new homes has substantially slowed down, new areas such as Nine Elms, Canary Wharf, Stratford, Acton, Paddington and Kings Cross continue to expand providing an abundance of ideal rentals, albeit not on the affordable side.
An absolutely stunning flat in a quintessential red brick building in the heart of Chelsea SW3.
3 bedrooms | 2 bathrooms | separate kitchen | 2nd floor | Guide Price £1,750,000 | Leasehold
Completely modernised with a fashionable, contemporary interior of very high specification throughout, while retaining many of its period features. The reception room has been opened to create a generous flowing space and overlooks pretty treelined Beaufort street.
The stylish kitchen is easily incorporated into the space or divided from it with a sliding
pocket door. It is well equipped with a gas hob and electric oven, metro tile splash backs and plentiful storage. The flooring in all principal rooms is an attractive chevron parquet and adds to its very modern yet characterful appeal. There is an en-suite bathroom in the principal bedroom and a separate shower room, both with modern yet period style suites.
An ideal place for shopping and entertainment in London’s West End.
Located in a discreet apartment block in Mayfair, adjacent to Hanover Square and moments from Regents Street. This fourth floor two bedroom flat has a large open plan reception room with a balcony with views of the square.
The two bedrooms, one of which is ensuite, have built in storage and are away from the street and very private.
This property is so convenient and so easy to manage, that it makes an ideal central home, or a London base for an international buyer.
London’s west end is famous for its fashion stores, theatres, bars and restaurants. You are moments from Saville Row, Bond Street, Carnaby Street and theatreland located in adjacent Soho. Both Hyde Park and Regents Park are within walking distance or a short commute on the ample choice of transport links.
Our favourite attributes
A great place to have a pier de terre.
A sound long term investment.
A fun and exciting place to live.
An excellent rental investment.
