April 2022 Newsletter
Here is our latest round-up of the current talking points in the London property market.
Latest sales figures – In a recent report from Knight Frank they note that in prime central London (PCL), average prices grew by 2.1% in the year to March 22 – the strongest annual rate of growth since May 2015. Average prices in PCL are 16% lower than they were at the start of 2016. This they say, compares to a 9% decline in prime outer London and a 13% increase in country markets.
These figures can in part be explained by the increase in new prospective buyers but with Covid lockdowns continuing around the world, Knight Frank predict that stronger price growth will return next year when overseas demand increases, and the opposite is likely to be the case for prices in prime outer London, which they expect to peak this year. They expect demand to then soften as mortgage rates rise and the cost-of-living squeeze intensifies.
What the future holds – with the recent spurt in the market, how should we look forward? A report by Money Week suggests that it is all part of a much longer 18- year cycle that will peak in 2026.
The devil is in the detail – whilst these headline figures are interesting, when it comes to buying, we believe it is very important to drill down into local area statistics. Also are you looking for a house or an apartment?
For example, in Hampstead, stats from Lonres show that flats are 5% cheaper now than they were in 2017, however houses are 10% more expensive. Moreover, in 2017 houses were on average 23% more expensive than flats, that figure is now 43%. In Marylebone, the story couldn’t be more different – houses and apartments cost the same per sqft, as they did in 2017. Both are still 5% cheaper than they were in 2017.
Buy to lets back in fashion? In PCL, rents are reportedly 8.2% higher than they were before the beginning of the Covid-19 pandemic. This increase in yield together with higher inflation, is making investors look favourably at buy to lets over other investment options.
The best in the West – New developments in the Holland Park/Kensington High St/Bayswater area have historically been few and far between but the last few years has seen a surprising number of new options. With Holland Green being well received by the market, the beginning of the month saw the launch of Holland Park Gate (the old Kensington Odeon) just across the road. The development of 71 apartments, has kept the much-loved heritage façade (currently being restored off site) and the apartments are being sold at a blended average £3,400 psf. Completion of the whole site is due for the end of 2024.
The revamp of Queensway is well and truly underway with both the Whiteleys development and Park Modern transforming either end of the street. Traditionally, it has been well known for its collection of Chinese restaurants and tourist shops but that is also beginning to change. With the new apartments selling at over 3000/sqft it makes apartments in existing blocks on the street like look cheap at £1200/sqft.
The Elizabeth Line: the grand opening still waiting to happen – we have excitedly talked about this project for years now but with one delay after another, the excitement has dissipated for many and there is a strong chance that the opening could come and go without many even noticing! TFL’s website is still saying it will open in the first half of 2022 and so surely the countdown is on. For of those of you that need reminding: it will have 73 miles of track, running from Reading in the west to Shenfield in the east; platforms on the new stations will be 240m long, this will mean at Liverpool street station that the platforms reach the next station – Moorgate ; some platforms are nine stories underground; it will mean an additional 1.5m people will be 45mins closer to central London.
I agree with those who say that it is an alternate universe – one we have not seen before. I personally can’t wait!
Do new builds lose their shine? We have always been wary of buying off plan. Yes, there have been times when buying early then meant you could surf the wave of a rising market, but many have also experienced the stress of locking in only to see the market crash.
Apart from the uncertainty, the other key factor to remember when buying off plan is that you are paying a premium for it being new – just like buying a new car. A recent study by the FT found that “new build homes sold seven years after they were built had, on average, underperformed the local benchmark by 10 percentage points.” Throw in the future unknowns like the current cladding crisis and maybe you should think twice.
To Find Out More, Get in Touch
If you’d like to receive professional and informed advice when it comes to finding your London property, get in touch with our buying agents, myself and Olivier today.
Regards,
Jane Wood
Founding partner