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London third for super-prime property availability

London is currently home to the third largest available level of super-prime property market stock, with just Hong Kong and New York placing above it, according to research from London estate agency Bective.

There are an estimated 63 billionaires currently living in London, accounting for 2.3% of the world’s total.

When analysing this number in relation to the city’s total population, Bective’s research found that London ranks third for the highest number of billionaires per 100,000 of the local population (0.70).

Just San Francisco (1.45) and Hong Kong (1.07) currently have more billionaires per 100,000 of the local population.

Bective’s research also found that London sits within the top three in terms of the availability of super-prime property stock for existing, or future, billionaire homebuyers.

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Bective analysed 10 global cities based on the level of homes currently for sale at the £10m mark or above.

The research showed that globally, there are 1,890 homes listed for sale at the very top end of the market across these 10 global destinations.

317 of these are located in London, meaning the city accounted for 16.8% of this global, super-prime property stock.

Just Hong Kong (904) and New York (537) are home to more £10m-plus properties listed for sale, accounting for 47.8% and 28.4% of the global market respectively.

In contrast, super-prime homebuyers face the toughest task in Moscow and Mumbai, with each nation accounting for just 0.1% of all super-prime properties on the market.

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Craig Tonkin, sales director at Bective, said: “It’s fair to say that the pandemic has proved more problematic for London’s super-prime market than it has for the rest of the UK market and ongoing travel restrictions have stifled demand at this very top tier since the start of last year.

“However, we’re now seeing signs that this is on the turn and the prime London market, as a whole, is well poised to make a swift recovery.

“Not only does it boast the quality of properties that appeal to the super-wealthy homebuyer, but it also has the available stock to sustain this appetite for high-end homeownership.

“As a result, London continues to rank as one of the dominant forces within the global, super-prime property market and the city remains an area of high interest for the world’s wealthiest homebuyers.”

By Jake Carter

Source: Mortgage Introducer

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London property: First-time buyers make a comeback

Nearly three in every ten home sales went to first-time buyers last month, the highest proportion in over a year, according to new data from various large estate agents.

It marks the highest percentage since June 2020, when 29 per cent sales went to people getting on the property ladder, according to estate agents’ body Propertymark.

It was the strongest August for sales to first-time buyers since 2016, when the percentage was also 28 per cent.

There have been signs of the housing market becoming less frenzied after a stamp duty holiday in England and Northern Ireland was tapered from July.

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Many mortgage lenders have also reintroduced low-deposit mortgages in recent months, after many such deals disappeared last year in the uncertain economy.

The figures also suggest that competition for homes remains strong amid a lack of supply.

Across the UK

Across the UK housing market, more than a third (37 per cent) of properties sold for more than the original asking price in August, up from 31 per cent in July.

In August 2020, just 13 per cent of homes sold over the asking price.

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The average number of properties available per member branch stood at 23 in August, down from 28 per branch in July.

This means there is an average of 19 buyers chasing every available property on the market, Propertymark said.

Chief executive Nathan Emerson said: “This month’s report shows an enduring appetite amongst buyers, including the ongoing wave of new buyers securing their first homes.

“Lifestyle changes are still prevalent, and buyers are now looking to a future which is very different from the one they envisioned two years ago.

“The search for green space, home offices and more flexible living is a trend that is unlikely to see demand diminish before the new year.”

By Michiel Willems

Source: City AM

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Will London Rents Recover After Covid?

Inner London bore the brunt of the pandemic’s impact on the rental market which saw a decade of rental growth wiped out. In previous downturns, Inner London has typically been the region to lead the rest of the country. But this time around it was the only area where rents fell for 13 consecutive months, while rents in other regions reached record highs. However, it appears that late spring marked the bottom of the Inner London market.

For the first time since April 2020, the average rent in Inner London rose on a monthly basis, averaging £2,103 pcm in June 2021 (chart 1). While the average rental home in Inner London costs 16.5 per cent or £415 pcm less than it did this time last year, rents jumped 4.3 per cent month-on-month between May and June, the largest monthly increase on record. June was also the third straight month that the annual decline in rents slowed.

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The reversal in the direction of rental growth has been driven by more tenants returning to the capital. Last month, the number of tenants registering to rent in Inner London was up 16 per cent on June 2020 levels and up 45 per cent on June 2019. Zone 2 recorded the strongest growth in demand, but this has been almost completely driven by domestic, rather than international tenants. Here, the share of tenants coming from outside the capital doubled as more people planned their return to London.

Rising rents have also been supported by lower stock levels, a reversal of the months following the height of the pandemic when landlords struggled to find long-term tenants for their short-term lets. While back in September 2020 there were 14 per cent more homes available to rent in Inner London than in September 2019, by June there were 8 per cent fewer homes to rent than two years ago. Family houses are most scarce, while entry level flats make up most of the homes taking more than a week to let.

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In contrast to Inner London, Outer London rents recorded only six months of falls on an annual basis following the onset of the pandemic. Outer London rents have grown for the last 10 months, with June’s annual rental growth (9.4 per cent) the strongest on record. The average rental home in Outer London now stands at £1,685 pcm,10 per cent more than it did when the pandemic started in March 2020.

Across Great Britain the pace of rental growth continued to climb in June, with rents rising 8.5 per cent year-on-year. In fact, four of the 10 fastest months for rental growth over the last decade have been since the onset of the pandemic. Stock scarcity has become a pressing issue, with 46 per cent fewer homes on the market than at the same time two years ago. In rural and suburban areas, the drop in rental homes on the market has been even greater.

Outside London, rents rose 10.9 per cent annually – the fastest rate of growth recorded during any time since 2014. Six regions saw rental growth hit double digits in June, up from five in May. Last month eight of the 11 GB regions recorded the biggest annual increases since the lettings index began in 2014. Wales, the West Midlands and London were the only regions not to register record rental growth.

Aneisha Beveridge, head of research at Hamptons, said: “Over the course of the pandemic, Inner London landlords have suffered more than investors anywhere else in the country. But in recent months rental growth here has changed course and is now on an upward trajectory. We are forecasting that rents in Inner London will return to pre-pandemic levels within 12 months.

She added: “That said, and despite a recovery, rents in Inner London are likely to remain lower than they would have been had the pandemic not happened. A relatively buoyant recovery has ensued as restrictions have been lifted, but some scarring is likely to remain as tenants become less closely bound to their office desk and international travellers remain in short supply. Nationally, the last 12 months have seen five years of pre-pandemic growth squeezed into a year. Rents are rising at such a pace that monthly rental growth figures could, in more normal times, be mistaken for annual ones. While this growth is underpinned by a lack of stock, it will ultimately be tapered by affordability.”

BY PETE CARVILL

Source: Property Wire

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London’s Rental Market Heats up According to Chestertons

London’s rental market is witnessing a strong recovery in spite of the pandemic, according to Chestertons’ latest analysis. Comparing May to April, the agency’s 31 branches across London confirmed a cumulative 17 per cent increase in new tenant registrations and 10% increase in agreed lettings.

Whilst demand is up, the number of properties available to rent at the end of May 2021 was down, with Chestertons registering a 3 per cent reduction in supply compared to end of April 2021 and a staggering 24 per cent reduction compared to May 2020. With demand outstripping supply, fewer landlords are now willing to drop their rents which is a stark contrast to this time last year when high numbers of London landlords dropped their rents by up to 20 per cent.

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In fact, Chestertons confirms that in many London postcodes, rents increased in May vs April. Some of the areas that have seen the biggest rental increase are Barnes (+17 per cent), Wandsworth (+15 per cent), Mayfair (+23 per cent), Westminster (+18 per cent) and South Kensington (+12 per cent).

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Richard Davies, Head of Lettings at Chestertons, says: “The majority of tenants registering with us now see their return to the office as imminent; whether that’s full or part-time. With that in mind, and with rents at the lowest level they have been in years, tenants are rushing to snap up a London rental property at a reduced cost. At the same time, as lockdown restrictions are easing and travel becomes possible again, we are also seeing the return of overseas student demand. With the continuous increase of tenants wanting to move back to London, we expect London’s rental market to become increasingly competitive over the next few months; particularly during the summer, which has always been a key season for tenants to move.”

BY PETE CARVILL

Source: Property Wire

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The Most Affordable and Most-Expensive Places to Buy in London

The property market has boomed over the past year, thanks to the stamp duty holiday which has given a lot of first-time buyers the opportunity to get their foot on the property ladder. Coupled with the introduction of the new government backed 5 per cent deposit scheme, designed to help home buyers, the market isn’t showing any signs of slowing down just yet.

New analysis of London’s property prices by Ellis & Co, shows the areas of the city that are the most affordable for home buyers looking to buy something of their own. The research also revealed the most expensive areas of London to purchase a home, with average property prices in these areas almost reaching £2m.

The top 10 most affordable areas to buy a property in London:

London PostcodeAreas coveredAverage property price
SE28Thamesmead£275,194
N9Lower Edmonton£324,420
N18Upper Edmonton£325,352
SE2Abbey Wood£330,345
SE25South Norwood£348,701
E6East Ham, Beckton£350,124
SE18Plumstead, Woolwich£351,089
SE20Anerley, Penge£380,445
E13Plaistow£382,300

The quiet residential area of Thamesmead is the most affordable area in London to buy a property. A home in the postcode area of SE28 has an average price of £275,194, almost £50,000 cheaper than the next most affordable area of Lower Edmonton.

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Southeast London is home to five of the top ten most affordable areas in London to buy a home, all coming in under £381,000. This means, under the new 5% deposit scheme, home buyers are able to get their foot on the property ladder in London with a deposit of as little as £13,759.

The top 10 most expensive areas to buy a property in London:

London PostcodeAreas coveredAverage property price
W8Kensington£1,949,475
W1Marylebone, Mayfair, Soho£1,820,143
WC2Covent Garden, Holborn, Strand£1,667,871
SW3Brompton, Chelsea£1,634,116
SW7South Kensington£1,528,409
W11Holland Park, Notting Hill£1,446,853
SW1Belgravia, Pimlico, Westminster£1,295,609
SW13Balham£1,189,849
NW3Hampstead, Swiss Cottage£1,137,545
NW8St John’s Wood£1,112,247

Eight of the top ten most expensive areas of London are located in the West and South West, with the average property price in these areas coming in at £1.56 million. Two postcodes in North West London have made the top ten, with St John’s Wood, Hampstead and Swiss Cottage having average property prices above £1 million.

In addition to uncovering the most affordable and most expensive areas to buy in London, Ellis & Co looked at some of the best areas to invest for those looking for the best up and coming areas, tenant demand or the locations with the best schools.

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Best up and coming area for property: Tottenham

Tottenham is one of the top ten most affordable areas in London to buy, with the average property price coming in at just over £400,000. As well as new homes being built and Tottenham Hotspur FC’s impressive new stadium, the area is currently in the early stages of a 20-year regeneration plan. Taking into account the changes in the area and plans for the future, it looks like it is set to be the best up and coming place for properties in London.

Best area to invest in property: Willesden Green

This area is hugely popular with renters making it a great place to invest in property, for those looking to be a landlord or expand their portfolio. Demand for rental properties is high in this North West borough and rental income returns a yield of 3.6 per cent. In addition, house prices have grown by 26 per cent in the area since April 2020, and this strong growth looks set to continue. Whilst it might not be the cheapest area to buy a property, with the average property costing around £457,000, it is a highly sought-after area for young professional renters, so investors could see a healthy long-term return.

Best area for schools: Harrow

Harrow could be the best place to buy a new home if having access to great schools is high on the priority list for families. The area is home to 16 schools rated “Outstanding”, giving parents plenty to choose from, including both state and private options. Some of the highly rated schools in the area include Belmont, Marlborough, and Whitmore High. The average property price in the area is £460,408, which is more affordable than many other areas of London.

BY PETE CARVILL

Source: Property Wire

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Super-prime tenancies rebound in the second half of 2020

Super-prime tenancies, that’s tenancies with a £5k+ pw rent, have seen a resurgence during the COVID-19 pandemic with the period between July and December 2020 being the most active in the past seven years.

In total there were 137 such tenancies taken out in London during 2020 – this was down 11% on the 154 taken out in 2019. However, following the onset of the pandemic this changed with 87 tenancies agreed in the last six months of the year.

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It underlines how demand has not been dented by the pandemic, according to Tom Smith, head of super-prime lettings at Knight Frank.

He said: “A big driver in recent years has been the rates of stamp duty in the sales market and it is still a big motivation for tenants.

“That rationale is still there and will arguably grow with the extra 2% surcharge that overseas buyers will have to pay from April.”

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However the market is now being hit with a lack of supply in areas such as Chelsea, Notting Hill and St Johns Wood.

Smith said that this may improve in the coming weeks as lockdown restrictions continue to ease.

He added: “We are now having conversations with owners who say they would be open to either a sale or a letting and some strong offers are coming through in the sales market now.”

By Ryan Fowler

Source: Mortgage Introducer

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London property prices hold up for investors

London flat and maisonettes have risen by 9.0% on last year to £442,304, according to Herddle analysis of government data.

The average price of all types of London properties has risen by 9.7% over the last despite the pandemic and the economic impact of Brexit.

This compares to inflation of just 0.8%.

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Corey Cumins, chief executive of Herddle, said: “Investors and landlords who held their nerve AND held onto their flats have been rewarded with some remarkable performance. Prices of flats and maisonettes have risen by 9.0% and that’s way ahead of inflation.

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“Looking ahead, it’s reasonable to expect more economic volatility – as both Brexit and new strains of COVID bite into companies, wages and jobs.

“We could see some house price volatility but that’s never a reason to sell assets – and we expect to see investors and landlords continue holding their nerve.”

BY RYAN BEMBRIDGE

Source: Property Wire

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London’s Islington leads the way on house price growth

Prices in London’s Islington surged by 13.4% to £727,922 in 2020, making it fastest growing area in the UK, Thirlmere Deacon analysis of Halifax data has found.

A number of other areas in Greater London also recorded strong rises, like Croydon (10.9% to £397,538), Hounslow (9.1% to £523,659) and Romford (7.6% to £391,000).

Outside London the biggest mover was Leeds, which had the country’s second-fastest rise, a whopping 11.3% to an average price of £247,116.

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Stuart Williams, founder and chief executive of Thirlmere Deacon, said: “Over the past 24 months, the UK property market has endured changing economic and political climates and remains to be incredibly resilient.

2019 brought political uncertainty and Brexit lingered over the UK, after the decisive election result in December 2019 the property market began 2020, with relative optimism and the ‘Boris Bounce’ triggered activity.

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“As the pandemic took hold and the UK entered lockdown, the property market was effectively put on pause though a limited number of transactions completed and off plan purchases were agreed during this time.

“Upon reopening in mid-May the UK property market saw pent up demand unleashed which has driven price growth upwards – every region in the country recorded an increase in house prices in 2020.”

BY RYAN BEMBRIDGE

Source: Property Wire

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London saw greatest number of homes bought in 2020

London was noted as recording the greatest number of property purchases across the UK in 2020, according to reallymoving.

The data shows that the capital saw 13.7% of all completions, followed by Leeds at 1.7% and Birmingham at 1.6%.

Between July and December 2020, the proportion of first-time buyers in the market fell by 12% compared to the same period last year.

Over 2020, FTBs made up 51% of all buyers in the market, compared to 56% in 2019.

While 16% of FTBs opted for a new build home over an older property, almost half of those (46%) used a Help to Buy equity loan enabling them to buy with a deposit of just 5%.

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The average house price in England and Wales increased by from £293,819 in January 2020 to £352,239 in December 2020.

However, reallymoving predict that prices will fall by 1.2% in January and 2.5% in February 2021.

Home movers sold their homes for an average price of £313,149 and bought for an average price of £379,191.

Meanwhile, FTBs paid an average price of £262,180 for their first home.

Furthermore, the proportion of FTBs in England liable to pay stamp duty fell from 25% to just 5%, following the announcement of a stamp duty holiday.

Nine out of ten (91%) transactions by all homebuyers, including FTBs, have avoided the tax since July, prompting a surge in market activity and prices.

The data also shows that the cost of moving home dropped by 39% in 2020 from an average of £10,911 before the stamp duty holiday came into effect to £6,669 after.

According to reallymoving, costs such as legal fees rose however, as a consequence of being directly tied to rising house prices.

Those buying and selling a home typically paid £1,682 in legal fees, while FTBs paid £1,100, up 15% and 11%, respectively.

This data is based on 910,000 quotes generated on the reallymoving site throughout the year.

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Rob Houghton, chief executive of reallymoving, said: “The property market took us on a rollercoaster in 2020, from shock and despair when thousands of home movers were forced to press pause back in March, to the extraordinary resurgence in demand that began in the early summer and continued right through to the end of the year.

“Most concerning however, has been the decline in the proportion of FTBs in the market. They largely didn’t benefit from the stamp duty holiday and faced huge challenges securing finance as higher loan-to-value mortgages disappeared overnight and several high street lenders banned gifted deposits.

“Yet there are reasons to be optimistic that 2021 could see a reversal in fortunes for FTBs as lenders return to the market, competition for homes is reduced and price inflation readjusts downwards.

“Reallymoving is on a mission over the coming year to help homebuyers upskill with a series of live webinars and content designed to help inform and educate about the process, ensuring buyers have everything they need to navigate a successful home purchase.”

By Jake Carter

Source: Mortgage Introducer

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Prime London activity rises

Property instructions in Prime London rose by 68% year-on-year in October, suggesting there will be more completions in the months ahead.

The analysis, from LonRes, also found that transaction levels crept by 4% annually in October, with 25% more houses being sold.

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Marcus Dixon, head of research at LonRes, said: “As England enters its second, hopefully short-lived lockdown, the property market has been spared any significant restrictions. Indeed, viewings, negotiations and progression of property transactions are one of the few things which can continue under current rules.

“Nationally agents are reporting significant increases in sales, and while activity levels across prime London are more subdued, they are starting to translate into in sales (exchanges). That said, buyers remain cautious, with prices at or slightly below levels seen a year ago.

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“Like those moving out of the capital, it’s space that buyers across prime London are looking for. More expensive homes, particularly family houses, are in demand and have seen the strongest growth – both in terms of achieved prices and volumes sold.”

While the jump in instructions is significant, last year was a particularly slow year for Prime London. Indeed, instructions are 37% higher than the 5-year average.

BY RYAN BEMBRIDGE

Source: Property Wire

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