How Would You Describe The London Market Right Now?
“The London market is definitely seeing a bounce back from the pandemic. It can largely be attributed to the boomerang phenomenon, with former sellers returning to the capital, now as buyers. Buyer specifications did change during the pandemic – the ‘race for space’ became prominent as they looked for properties with room for home offices and gardens. Although there is still only slow growth when it comes to the London market, it is beginning to pick up, with annual house price inflation up 5.4% – its strongest level since the end of 2020.” – Ross Counsell, chartered surveyor & director of Good Move
“If I were to describe it in one word, it would be ‘competitive’. Prices are going up due to the issues with low supply and high demand. While supply and demand issues have improved since last year, there is still pressure on supply which is pushing up prices.” – Sophie Durkin, regional director of Portico
So You’re Seeing More Interest In The London Market Again?
“Interest in the London market is beginning to pick up again with searches for ‘properties for sale in London’ up more than 100% over the past three months. With workers returning to the office, commuter life suddenly doesn’t seem so appealing now. With so much lost during the lockdowns, young people are prioritising a social life once more – and there is a lot more going on in the capital. Recent research we conducted found that over 60% of London parents had their children return to the family home over the pandemic – we can expect to see a lot of these young adults looking to move back out. A domino effect is that there is expected to be an increased opportunity for those looking to buy-to-let. With rising house prices and average deposits reaching £76,050 for many first-time buyers, the capital’s property prices are just not feasible. Research also revealed that a quarter of first-time buyers take between five and ten years to save up to buy a home. Therefore, renting could be a much more attractive option in the current market.” – Ross
What Do You Find Most London Buyers Are Looking For?
“London buyers are looking for well-presented, attractive properties that are close to schools and local infrastructure. A big trend to come out of the pandemic was the heightened demand for outside space and flexible indoor space for working from home, and this is here to stay. However, while flats really lost their desirability during Covid, they are now back in demand as long as they offer good space and convenient transport links.” – Sophie
“Many people move to London for work, so good transport links are a must. Areas such as Croydon are currently very desirable for both renters and buyers. Again, people look for lively communities to be part of, where there are plenty of options for them to go out and enjoy themselves with friends and colleagues alike. Although buyers during lockdown were looking for extra space and lower average prices, priorities have changed, and convenience and culture are now at the top of the list again.” – Ross
Would You Describe It As A Buyer’s Or Seller's Market?
“Right now, the control is in the hands of the seller, as the demand continues to outweigh supply. For those buyers, and lockdown savers, who have the means to purchase a property, they will be willing to put in a higher offer to attain their dream property. But it's not all bad news for prospective buyers. We know that higher house prices are due to a lack of supply, but this could change in the months to come. Inflation in the UK is at an all-time high but will likely remain higher for longer due to surging oil and gas prices as well as the devastating situation in Ukraine. This, along with the rising cost of living and energy prices, will no doubt lessen demand for property, and should see house prices ease and stabilise in the next few months. For anyone looking to buy, I would suggest waiting until May onwards." – Ross
“Buyers who wish to purchase in London need to go into the process with their eyes wide open and be prepared for their property search to take time. It’s also important to have a well-informed solicitor and mortgage broker who understands the intricacies of the London market.” – Sophie
Are There Any Areas Of London Proving Particularly Popular Right Now?
“Younger people are flocking to areas like Shoreditch and Hoxton to rent. This means that buying-to-let in these areas is a very wise decision for those looking to rent out to young professionals. As mentioned, Croydon is also a very popular area for both buyers and renters right now thanks to good transport links and its surprisingly central location. The area sits just 11 miles from London Charing Cross, so the city centre is easily in reach.” – Ross
What End of the Market Is Seeing The Most Activity?
“In terms of prices, three-to-four-bedroom properties valued at a million pounds and up are seeing a lot of activity. The two-bedroom market is also busy with prices typically around £500-600,000. However, it is worth noting that in some areas such as Walthamstow there is significant interest in three-to-four-bedroom properties which are available at a lower price point. Generally, it is the size requirements of the property that will be the biggest draw.” – Sophie
Is There Anything Buyers Or Sellers Need To Be Aware Of?
“The main thing buyers need to be aware of is the increased cost of living. This will have a significant knock-on effect on the affordability criteria for lenders and will be particularly tough on first-time buyers. I would recommend anyone looking to buy speak to a mortgage broker as soon as possible, so you can see just what is affordable for you in the eyes of a prospective lender.” – Sophie
“One thing I would keep an eye out for is new government legislation – particularly surrounding energy and green initiatives. If recent proposals by the Energy Efficiency Infrastructure Group (EEIG) are anything to go by, homeowners with poor EPCs (Energy Performance Certificates) could end up paying more stamp duty.” – Ross
And How About The Rental Market – What's Going On There?
“The rental market has acted more like a yoyo over the past couple of years during the pandemic with respect to prices. We found some rents agreed were as much as 25% lower than pre-pandemic rents purely due to a lack of demand and sharers not wanting to share. It’s very simple – location didn’t play as much of a part during the pandemic as London was in lockdown, and the demographic of students and groups of friends who tend to rent in more central locations and pay a higher rent were back home with their families. This left centrally located properties empty. We have found that post-pandemic, universities, offices and amenities all being open and thriving has encouraged the desire to be in and around London again. Due to this, though, the market has been stripped of even more supply, so high-standard rental properties are fetching anywhere from 10%-20% more than they did pre-pandemic.” – Cos Papanastasiou, director at Element Properties & Co.
So Is Now A Good Time To Be Renting Or Not?
“It is a tough market for renters at present, if you are looking to secure a rental property you need to be prepared to act fast. I recommend having referees, paperwork and finances ready. Landlords will be looking for a reliable tenant and any delay will work against you, especially in such a competitive market.” – Sophie
“Renting will always be required, and I do not believe there is ever a good or bad time to rent. Renting either acts as an interim between buying your own home, allowing a renter to test run an area for instance, or in many cases it allows flexibility for the renter in terms of lifestyle, job prospects around the country and so on. A good tenant is worth their weight in gold, so a good credit profile with good references from a previous landlord is valuable. I always encourage renters to begin building credit as early as possible. Other caveats such as the length of the tenancy, a small bio about hobbies and interests, and committing to keeping the property in good condition and clean can help.” – Cos
Anything Landlords Should Be Aware Of Right Now?
“Landlords should be aware of the growing need for inner-city apartments, so if you are looking at purchasing a buy-to-let property in the city, now is the time. If you are including all bills within the rent, I’d suggest you look into the inflation rises as the energy crisis takes full hold. If you have any current tenants, it is a good idea to discuss this with them and give notice that you may be raising rent prices in accordance.” – Ross
Finally, What Do You Expect To Happen In The London Market In The Next 12 Months?
“For sales, I don’t expect to see a massive increase in supply, so the current imbalance will remain. It won’t be as stark as it was last year, and I’d expect affordability issues to reduce buyer demand. In terms of lettings, while rents are likely to increase further in the coming months, typically rental supply increases in the summer, so this should ease some of the pressure.” – Sophie
“The London market should expect to grow further over the next couple of months – in terms of both the rental market and the property market. As indicated above, London prices have continued to grow with annual house price inflation now standing at 5.4%, its strongest level since the end of 2020. We will see a lot more professionals migrating back into the capital’s flats and housing as working life returns to normal. Plus, now that borders have opened back up, it’s likely international buyers will be looking for second homes in the city.” – Ross