Marketing No Comments

London property: Number of new homes on the market drops across all boroughs

The London property market has been hit by the UK’s coronavirus lockdown, with all boroughs suffering a sharp decline in the number of new homes on the market.

Outer boroughs such as Hillingdon and Bromley have seen the steepest drop, with the number of new homes for sale falling 91 per cent since restrictions were implemented last month.

Merton and Redbridge both saw new listings decline 90 per per cent and Sutton suffered an 89 per cent drop.

The number of new homes on the market dropped across the whole of the capital. However inner London boroughs fared better than more far-flung areas.

The City of London and Westminster saw the number of new listings fall 67 per cent and 74 per cent respectively, according to research by property platform Get Agent.

The coronavirus lockdown had the least impact on the housing market in Greenwich, where new homes fell 29 per cent, followed by the 64 per cent drop seen in Tower Hamlets.

Across the UK, Woking suffered the biggest decline – of 94 per cent – and West Lancashire came out on top with a drop of 25.8 per cent.

“In some areas, such as Woking, the market has pretty much dropped off a cliff since the lockdown was implemented, whereas other areas have seen a decline but continue to register more robust levels of new listings,” said Get Agent chief executive Colby Short.

“This is certainly due to influences such as a high concentration of new-builds, with many developers having to keep selling due to the fact that they have money tied into developments and interest repayments to make.

“Many new build developers also have the benefit of selling empty properties which makes social distancing measures easier, while many new build buyers, particularly those from overseas are happier to transact based on a virtual viewing.”

London boroughs
BoroughChange
Hillingdon-91%
Bromley-91%
Redbridge-90%
Merton-90%
Sutton-89%
Bexley-88%
Harrow-87%
Richmond upon Thames-87%
Havering-87%
Barking and Dagenham-86%
Ealing-86%
Islington-85%
Enfield-85%
Croydon-85%
Wandsworth-84%
Barnet-84%
Hounslow-83%
Haringey-83%
Kensington and Chelsea-82%
Kingston upon Thames-82%
Lambeth-81%
Waltham Forest-81%
Southwark-80%
Lewisham-80%
Hackney-79%
Newham-78%
Camden-78%
Brent-77%
Hammersmith and Fulham-76%
Westminster-74%
City of London-67%
Tower Hamlets-64%
Greenwich-29%

By Jessica Clark

Source: City AM

Marketing No Comments

London house prices have recovered most from recession

House prices in London have recovered the most from the global financial crisis, London lettings and estate agent Benham and Reeves has revealed.

Despite the Brexit slowdown, typical prices in the City of London are 89% higher than the pre-crisis peak of August 2007, rising from £474,000 to £898,000 in September 2019.

Marc von Grundherr, director of Benham and Reeves, said: “Despite the recent negative headlines about the London housing market, the capital has made the strongest recovery from the global financial crisis and continues to do so despite wider market uncertainty.

“This recovery also seems to extend to other parts of the South East of England and while these more inflated areas may have seen a drop in the rate of price growth of late, they remain the most durable on a long-term basis.

“Proof, if it was ever needed, that the UK property market is far tougher than many give it credit for and any momentary blip caused by the current landscape will leave no lasting damage.”

Other areas in the capital where the cost of property has increased are Hackney (88%), Waltham Forest (83%) and Lewisham (83%).

Outside of London, house prices in Cambridge increased the most between August 2007 and September 2019, rising from £275,000 to £456,000.

For the UK as a whole, prices have risen by 23% over the period.

By Michael Lloyd

Source: Mortgage Introducer

Marketing No Comments

London housing market ‘showing signs of life’ as property prices increase

House price growth in London is showing signs of firming up following a period in the doldrums, according to a report.

Less than a quarter (23%) of London postcodes have registered negative house price growth in October, down from 82% registering price falls a year ago, according to Zoopla.

But the rate of annual growth in property values is slowing across the UK’s major cities generally.

Annual house price growth in every city covered by the index has now been running below 5% for three months in a row – in August, September and October.

The last time there was a three-month run of annual price growth below 5% in all 20 cities covered by the index was in 2012. It happened during September, October and November in that year.

The latest report showed annual house price growth in October ranged from 4.7% in Leicester to minus 5.9% in Aberdeen.

The October report marks the four-year anniversary of consecutive year-on-year house price falls in Aberdeen, prompted by a collapse in the oil price in 2015, Zoopla said.

Meanwhile, across London, house prices increased by 1% annually in October.

This is the highest rate of growth for London for two years, following a period of year-on-year price falls, Zoopla said.

A year earlier, house prices in London were falling by 1.1% annually.

House prices in London recovered more quickly following the financial downturn than in many other parts of the UK.

But as housing affordability became more stretched in London other more affordable areas have seen stronger house price growth by comparison.

Zoopla said the shift in London house price momentum is down to a decrease in the number of new properties for sale, which has restricted supply.

This is a trend that has been developing for the last 12 months and has been accelerated by the announcement of the forthcoming General Election, it said.

Zoopla also said there had been a “notable increase” in the number of sales agreed per agency branch – indicating renewed demand for housing in London after falling sales volumes over the past three years.

There are also signs that house sellers’ expectations are becoming more realistic.

In early 2016, when buyer demand in London started to weaken, the market grappled with a 20% gap between the price of new listings coming to the market for sale and the price of property being marked as sold on Zoopla.

The gap between asking and selling prices has been steadily narrowing it said – which should help support London house sales during 2020.

Richard Donnell, research and insight director at Zoopla, said: “The London housing market is finally showing signs of life.

“The shift in momentum is clear, resulting from a lack of supply, increased sales and more realistic pricing, which bode well for higher sales activity in 2020, rather than a pick-up in house price growth.

“While the London housing market has been in the doldrums, market conditions in regional cities have been stronger over the last two years with demand supported by employment growth and attractive housing affordability.

“The rate of growth is slowing, and all cities are registering annual growth of less than 5%.

“The announcement of the General Election has brought forward the usual seasonal slowdown, but the last few weeks of the year pre-Christmas tend to be much quieter than after Boxing Day, when consumer interest in housing springs back to life.”

Here are average house prices in October followed by the annual change in prices, according to Zoopla:
– Leicester, £180,000, 4.7%
– Manchester, £172,500, 4.6%
– Liverpool, £122,300, 4.1%
– Edinburgh, £236,700, 4.0%
– Belfast, £137,600, 4.0%
– Birmingham, £167,000, 3.5%
– Nottingham, £156,700, 3.4%
– Leeds, £167,800, 3.4%
– Cardiff, £210,100, 3.1%
– Sheffield, £138,400, 3.1%
– Bristol, £282,800, 3.0%
– Newcastle, £129,100, 2.7%
– Glasgow, £123,200, 2.6%
– Cambridge, £414,000, 2.2%
– Bournemouth, £289,800, 2.1%
– Portsmouth, £238,600, 1.2%
– Southampton, £227,900, 1.2%
– London, £476,900, 1.0%
– Oxford, £412,200, 0.0%
– Aberdeen, £154,100, minus 5.9%

By Vicky Shaw

Source: Yahoo Finance UK

Marketing No Comments

Super prime property market in London seeing resilience in the face of Brexit

Buyers spent a total of £2.06 billion on super prime properties in London in the year to May 2019.

This was marginally higher than a figure of £2.05 billion in the previous 12 months, according to super prime sales market insight report for Winter 2019 from international real estate firm Knight Frank.

The market for properties worth £10 million plus is showing a resilience in terms of demand against an uncertain political backdrop, but overall transaction volumes fell 13% to 104 from 120.

‘Political uncertainty has affected sentiment over the last five years, however, this has intensified as the UK’s intended departure from the European Union continues to be discussed, combined with the impact of wider global economic tensions,’ said Tom Bill, head of London residential research.

‘However, higher value sales are increasing, as high net worth individuals target London and take advantage of the weak pound,’ he added.

The report also shows that 73% of super prime buyers were below 50 in the year to September 2019, which was up from less than half at the start of 2015.

Some 16 transactions above £30 million took place in the year to May 2019 compared to 11 over the previous 12 months.

Meanwhile, the ratio of new prospective buyers to new sales listings above £10 million climbed to 6.5 in the third quarter of 2019, the highest figure since the first quarter of 2014.

‘Beyond Brexit, there are global trade and geopolitical tensions that mean other super prime residential markets have slowed. While there are fewer discretionary buyers in London, well-priced and good quality stock is seeing strong interest and leaves me convinced that demand will accelerate once Brexit has been resolved,’ said Rory Penn, joint head of Knight Frank’s Private Office .

According to Victoria Garrett, head of residential, Asia-Pacific at Knight Frank, there is a strong appetite for the London market from buyers in Asia. ‘A combination of the currency discount, relative political stability and a world class education system means London is the logical choice for many buyers at the super prime level,’ she said.

‘When more clarity around Brexit emerges and there is more currency stability, much of the pent-up demand will be released,’ she added.

Source: Property Wire

Marketing No Comments

London house price growth remains below UK city average

House prices in London edged up 0.2 per cent in August but inflation remained below the UK average growth rate for cities of 1.9 per cent.

However, mortgages for home purchases in London have been increasing slowly following the lower numbers seen since late 2014, suggesting that the decline in London housing sales has bottomed out.

Data from Zoopla and Hometrack shows that 9.7 per cent of live listings had the price reduced – the lowest level for three years.

“We do not expect house price growth to increase but builders and agents in London will welcome any improvement in market activity,” the House Prince Index report said.

Leicester is the fastest growing city as house prices have increased 4.8 per cent, while Aberdeen has the lowest growth in the country with a rate of minus four, according to research by Zoopla and Hometrack. August was the first time since 2012 that no big city saw annual property growth rise above 5 per cent.

Bentham and Reeves director Marc von Grunderr said: “London continues to act as a house price growth anchor for the time being and this is largely being driven from the inside out as those who have seen the largest decline in property values continue to hold fire for greener pastures on the other side of the Brexit bridge.

“However, to view the capital as down and out when it comes to its property pedigree would be very foolish indeed. London is currently a sleeping giant rather than a crumbling carcass and once stability returns, so too will buoyant house price growth.”

The acceleration in house price inflation since 2013, which reached almost 20 per cent in London in 2014, and the slowdown since 2016 are “part of the unfolding house price cycle”, the research said.

CityCurrent price% year-on-year August 2019
London£483,8000.2 per cent
Leicester£182,9004.8 per cent
Liverpool£124,7004.6 per cent
Manchester£173,0004.5 per cent
Cardiff£211,8004.1 per cent
Edinburgh£235,4004 per cent
Birmingham£168,3003.8 per cent
Belfast£136,4003.6 per cent
Leeds£168,9003.5per cent
Glasgow£127,0003.3 per cent
Nottingham£155,3003.1 per cent
Sheffield£139,6002.8 per cent
Bristol£283,0002.2 per cent
Newcastle£128,9002 per cent
Bournemouth£293,6001.3 per cent
Southampton£228,3000.5 per cent
Cambridge£429,5000.3 per cent
Portsmouth£237,8000.2 per cent
Oxford£409,100-0.4 per cent
Aberdeen£158,800-4 per cent
20 city index£257,9001.9 per cent
UK£220,7002.1 per cent

By Jessica Clark

Source: City AM

Marketing No Comments

Demand for retail property in London plummets

Demand for retail property in London is approaching lows last seen after the 2008 financial crash, according to new research.

The latest UK Commercial Property Market Survey results published today by the Royal Institute of Chartered Surveyors (RICS) showed that demand for retail property in London fell for the second quarter of the year.

In an indication of the ongoing malaise in the sector, retail was found to be responsible for pulling the overall figure in terms of demand for property down below zero, with a net balance of -61.

The retail property sector also posted the highest rise in terms of availabilities, with 52% of respondents reporting a “significant rise in availability”.

The survey also found demand from overseas investors continued to drop during the quarter as Brexit loomed, with respondents reporting -9% growth. This represented the third quarter in a row where overseas investor demand fell.

However, the RICS report found a rise in demand for industrial buildings – in particular warehouses for ecommerce.

Rents on prime and secondary retail sites are predicted to fall 3.5% and 7% respectively over the next 12 months.

RICS economist Tarrant Parsons said: “The overall picture remains little changed across the UK commercial property market in Q2, with the disparity between a strong backdrop for the industrial sector and weakness in retail still very evident. While expectations continue to point to solid rental and capital value growth in the former, further declines are expected in the latter.

“Brexit uncertainty also remains a notable headwind, causing caution across both occupiers and investors while they await clarity on the UK’s future trading relationship with the EU.”

By Hugh Radojev

Source: Retail Week

Marketing No Comments

London housing market rebounds slightly after Brexit delay

The London housing market showed signs of bouncing back last month as sentiment rose to its highest level since April 2017, according to the latest forecasts.

Negative trends in agreed sales, prices and new instructions all eased in May after the Brexit deadline was extended to October, the Royal Institute of Chartered Surveyors’ (RICS) latest housing market survey revealed.

Despite fresh optimism, the survey showed that house prices are still expected to fall over the next twelve months and sales expectations remained downbeat.

When it came to London house prices, 29 per cent more respondents predicted a fall than a rise in May, up from the April net balance of -59, which RICS said showed the pace of price decline slowing.

RICS chief economist Simon Rubinsohn said: “Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steadying.

“However much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.”

In the lettings market, tenant demand rose slightly but landlord instructions fell, causing near term rental expectations to jump to their highest level since May 2016.

By Callum Keown

Source: City AM

Marketing No Comments

This chart shows how badly house prices are faring in central London boroughs

Key measures of the health of central London’s housing market are trending downwards, according to a new graphic produced by UBS.

The Swiss investment bank sent its third ‘London residential monitor’ note to clients on Wednesday, which is based on analysis of over 100,000 listings on online property portals. UBS’ analysis found that:

  • More and more property listings in London are cutting their asking prices
  • Asking prices are being reduced on average by 2.6% versus historic prices
  • Most houses remain on the market for 128 days, a high since UBS has been measuring
  • Expensive houses in boroughs like Kensington & Chelsea are taking longer to sell

“The London housing market remains weak,” UBS analyst Osmaan Malik and his team wrote. “Stretched affordability, high levels of supply at prime price points, and numerous changes to stamp duty have all taken their toll, at a time where Brexit uncertainties linger.

“In past cycles, a London downturn has pre-empted a wider loss of momentum and decline in consumer confidence. The Bank of England appears to think this time may be different, as the capital is more exposed than the national market to stamp duty changes and is more likely to be impacted by the departure of European Union nationals.”

UBS’ data shows that the steepest house price discounts are in Kensington and Chelsea, where average listing prices are over 4% lower than historic averages. The borough also had the highest average asking price and listings in the area spend the longest time on the market.

Land values in prime central London declined by 2.8% in the fourth quarter of 2018, according to recent Knight Frank data, taking the annual decline to 5.6%.

Economists believe house price growth across the UK could be sluggish this year. Britain’s official exit from the EU in March is seen as the most important influencing factor on house prices across the country in 2019.

Source: Yahoo Finance UK

Marketing No Comments

London house price boom over, at least for now

The days of London house price rises hugely outpacing inflation won’t be returning anytime soon, even if Britain and the EU strike a Brexit deal, the vast majority of economists and analysts polled by Reuters said.

Property values in the capital, long a haven for foreign investors, more than tripled in the last 20 years, but demand and turnover have crumbled since the June 2016 vote to leave the European Union and property taxes were raised.

According to the Nov 13-22 Reuters poll, London house prices will fall 1.7 percent this year and another 0.3 percent in 2019. Asking prices in London fell 1.7 percent this month from October, according to property website Rightmove.

Sterling, the stock market and businesses have had a turbulent few years since Britons narrowly voted to end their 45-year membership of the EU.

With just over four months left until Brexit day, Prime Minister Theresa May faces opposition from lawmakers in all parties to her negotiated withdrawal deal, fuelling fears the country may leave without one.

As that risk appeared to grow on Nov. 15, shares in housebuilders Persimmon (PSN.L), Taylor Wimpey (TW.L) and Berkeley Group (BKGH.L) fell between 6 and 7 percent in their worst daily performance since the referendum.

“Things are starting to look a bit bleak. Uncertainty is about the only thing we can be certain about over the next two years,” said independent buying agent Henry Pryor.

Asked if there would be a return to strong turnover and above-inflation house price growth in London and the South East if a Brexit deal was struck, 14 of 17 respondents said no. Two said it would happen regardless and one said it depended on the deal.

But Brexit is not the only factor holding back prices – a sharp increase in Stamp Duty Land Tax, paid when buying a house, has particularly affected the capital where houses are much more expensive than the rest of the country.

“The high rates of SDLT will continue to stifle transaction volumes, especially in expensive price areas like London and the South East,” said Ray Boulger, a senior manager at mortgage broker John Charcol.

After next year’s modest dip London prices will rise 1.5 percent in 2020, the poll found. A separate Reuters survey said overall inflation would be 2.0 percent that year. [ECILT/GB]

Graphic on UK and London house prices forecast: tmsnrt.rs/2Q89SKn?eikon=true

Graphic on UK house price-to-earnings ratio: tmsnrt.rs/2R1jZgW

Graphic on outlook for London’s housing market: tmsnrt.rs/2DCgt8Z?eikon=true

LITTLE CHANCE OF CORRECTION

When asked about the probability of a significant correction in London’s housing market by end-2019 the median forecast was only 20 percent, significantly down from the 29 percent given in August. That may be partly explained by the view that prices are already falling.

But not everyone was gloomy about the capital’s prospects.

“London demand is starting to poke its head above the stamp duty-laden parapet again,” said Russell Quirk, chief executive of online estate agent eMoov.

“History tells us that you can’t subdue London long term and therefore it’s clear that the current downturn in the capital’s volumes and values is temporary.”

Nationally, house prices are forecast to rise 2.0 percent this year, 1.8 percent year and 2.0 percent again in 2020, the poll found.

Those moderate gains are below expectations for wage increases and will likely cheer first-time buyers who are struggling to get on the property ladder.

When asked to rate the level of London house prices on a scale of 1 to 10, where one is extremely cheap and 10 extremely expensive, the median response was 8. Nationally they were rated 7, where it has been for a couple of years.

While borrowing costs are currently low, the Bank of England is forecast to raise rates again after Brexit. But the new level of Bank Rate will still be historically low at 1.0 percent and it is not expected to rise to 1.25 percent until early 2020.

Source: UK Reuters

Marketing No Comments

Why Brexit is killing the London housing market

The growing uncertainty around the outcome of the long-drawn-out Brexit talks has made buyers wary of the housing market’s future in the capital. With stamp duty rises and the removal of tax breaks for buy-to-let investors, the climate is firmly on the sell, and high prices have deterred buyers.

In this unusual situation for the formerly buoyant London housing market, many are preferring to wait and see for any indication of changes in the short and medium term, preferring to keep their hands in their pockets for now.

Meanwhile, international buyers, the traditional engine of price growth in the city, have now slowed down their investment after an initial enthusiasm for a weaker pound in the aftermath of the vote. The possibility of a no-deal Brexit keeps surfacing time and time again, and with little progress on the negotiations front, sellers are left fearing the worst: a decline in property prices.

On the flipside, local and international buyers, especially first-time buyers, are hedging their bets that prices will fall, while keeping an eye on the affordability of mortgages. The recent rise of the Bank of England’s interest rate has led to more expensive mortgages and there are talks of more hikes to come by 2020.

Sellers have realised that they are going to have to lower their prices to find buyers, with many having already taken hits of up to 10%. After a long period with a marked lack of properties coming to the market, it is now inundated with more properties than at any time since September 2015. As a result, sellers are having to cut overly optimistic asking prices, even in rather central areas such as Hammersmith and Fulham (-3.3%), Ealing (-3.4%) and Hackney (-3.5%). Such examples offer buyers hope that there will be continued drops across the capital.

This is good news for landlords that are looking at making the most of vacation rentals, homestays and shorter rents, as a weaker pound, and hopefully minimal visa requirements, will help to drive tourists to the city. For those who cannot sell their properties right now, this could be an unexpected boon.

Source: Property Week