London prime property market report
We believe that 2015 will give buyers their strongest negotiating position for years.
Having seen enormous growth in capital values over the first half of this year, the market has now slowed considerably.
In fact on many days of the week we’ve seen more price reductions on existing properties than new properties coming onto the market. So, is this because prices have been unrealistically high? Or is it that property values are now dropping? In our opinion it’s a bit of both.
We are certainly not fore-seeing a crash in market values. However, we are noticing strong indications of a readjustment. The possibility of interest rate rises and pre-election rhetoric about a possible mansion tax may temporarily suppress potential for further growth, and may also provide a climate for further adjustments over the next six months or so. To compound this, Sterling is strengthening — which means that London properties now seem more expensive to overseas buyers. This is positive news for those concerned about an overheating market.
A good time to buy
Whilst capital growth in London property is likely to be much less than over the last five years, the underlying fundamentals of the market remain sound. Knight Frank expects prime central London growth to flatline to zero as the general election approaches, but then forecastscumulative growth of 20% between 2014 and 2018.Indeed, analysis of election years 1997, 2001, 2005 and 2010 shows that transactions fell beforehand and revived again in the three months afterwards. Our advice is to make the most of this temporary lull.
The shift from a sellers’ to a buyers’ market — and the expected post-election growth — make this an excellent time to buy London property. A period of self-regulation will create new opportunities for investors and occupiers.
Get an expert on your side
In recent years property has been in very short supply compared to substantial demand, but our strong and longstanding relationships with agents and developers means we have been able to source off-market properties and get our clients into on-market properties before anyone else.
However, in the current market our job is to ‘sort the wheat from the chaff’. Our clients find this invaluable, as they simply don’t have time to look at unsuitable properties sent to them by agents whose only interest is to sell anything and everything to anyone.
We only show our clients properties we’ve carefully selected and previewed ourselves, to ensure they truly fit their requirements.
So do our clients have an unfair advantage? The answer to that is probably! Having an excellent and experienced negotiator on your side is fundamental. A few days ago we negotiated 15% off the marketing price of a Chelsea flat. “You’ve saved me your fee, and more!” said our very happy client.
As always, whatever the market conditions, our clients can be assured of our experienced and knowledgeable guidance in procuring their ideal property for the best possible price.
Sarah Van der Noot – Managing Director, London Property Search.
View Our Market Comment Archive
Market Comment: Summer 2014
Market Comment: Spring 2014
Market Comment: Autumn 2013
Market Comment: February 2011
Market Comment: September 2010
Market Comment: June 2008