Let us consider a comparison of 2020 with the same period of 2019. The number of homes worth £1 million or more were designated as sold. They were added to the capital increase by 87 percent in the third quarter of 2020.
Prime Central London Properties have continued to defy the flow over the summer months, which are normally supposed to be considerably calmer.
However, the market is meeting robust demand by ample supply. In the three months to September, new for sale properties were 77% higher than in the same period last year.
Buyer and seller pricing expectations appear to be converging as well. Half of our London estate agents said that sellers’ pricing expectations for the property they are selling had declined. On the other hand, 44 percent reported that buyers’ budgets have decreased. Similarly, 35 percent and 29 percent of brokers reported an increase in pricing expectations from vendors and buyers, respectively.
Prices in prime London stayed unchanged in the third quarter of 2020, being 1.0 percent higher than a year earlier.
Research shows that the market is well-balanced but with little price change at the aggregate level. Indeed, prices in premium London stayed unchanged in the third quarter of 2020. They were 1.0 percent higher than a year before.
However, these aggregate data conceal considerable market inequality caused by a recent shift in lifestyle habits. Across all five prime London regions, the value of homes has outperformed that of apartments. Over the last three months, the strongest performing markets have been Victoria Park, Richmond, and Putney. As a result, people widely know them for having a strong family housing market. An expert Estate Agent in London has these areas on top.
Houses in central London increased marginally by 0.1 percent in Q3 2020, while flats fell by -0.4 percent. This is despite a dearth of interest from overseas purchasers who would normally be active in this market. Hence, travel restrictions have put hurdles for them. The availability of residences in this area is much more limited than in other districts of London. As a result, we anticipate limited supply to sustain prices in the future.
Because of the scarcity of available inventory at the top end, the highest value properties have outperformed somewhat. The value of property worth £2 million or more in outer prime London climbed by 0.5 percent in the three months to September. They rose by 2.4 percent over the previous year.
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In central London, properties worth £10 million or more increased in value by 0.2 percent in the quarter. Meanwhile, those valued less than £2 million decreased by -0.5 percent.
After suffering the most over the last six years the high end of the market continues to seem good value. This happened as a result of consecutive stamp duty adjustments and political instability,
GARDENS AS A PRIORITY
People have reported that the experience of lockdown has prompted many people to reconsider their existing residence. As a result, they look for a home with a garden.
In our most recent client and candidate poll, which was conducted in August, 71% of respondents in London stated that the quantity of garden or other outdoor space had become more essential to them in their quest for a new property. This growing demand for gardens has now resulted in price increases. Whereas residences in outer prime London with a balcony, terrace, access to a common garden, or no outdoor space at all lost value in the three months to September, those with a small, medium, or large garden grew in value.
This tendency is also evident in central London, where the value of residences with medium and large gardens has climbed by 0.2 and 0.4 percent, respectively.
Buyers and sellers will need to stay patient in the coming months as mortgage lenders, conveyancers, and surveyors struggle to keep up with the present market’s expectations.
Economic uncertainties and another impending Brexit deadline will make it tough to continue the present pace into the end of the year. However, the end of the stamp tax vacation on March 31, 2021, which corresponds with the implementation of a premium for international buyers, might spark a rush of activity in the first few months of next year.
Covid-19 will heavily influence the following years’ performances. We shall see to which amount the economy has recovered, where we stand with Covid-19, and the quest for a vaccine.
The broader tax environment may operate as a damper on future price increases as the economy and possibilities for wealth accumulation revive, especially since the government will need to focus heavily on tax collections once the economic recovery has gathered traction.
Relaxing international travel restrictions will be especially vital for central London and other markets that rely heavily on foreign demand. We will see when and how this will occur, but for the time being, the value on offer in these markets is a tempting purchasing opportunity for those with a longer time horizon.