The general trend in the last two years has been “the exodus of urban areas to more rural settings” and nowhere has this been seen more than in London. Transaction levels in central boroughs have been down and it is not until you reach the outer suburbs where you can find houses with large gardens that you see a higher level of transactions. In turn, those who are selling in the suburbs are also then moving out to more rural or coastal areas.
With recent COVID-19 travel restrictions for international travel and the fact that property in Central London consists mainly of apartments, many without outside space, you can see why Central London has had less buyer demand.
In my view, this has created value and therefore a great buying opportunity and the proof is there to be seen. One of my best purchases this year was in St. John’s Wood NW8 for an overseas European client.
St Johns Wood – two-bedroom for £675,000 with a beautiful communal garden – identical units listed on the market for £850,000
This client was not able to physically be in London and “their viewing” was undertaken through WhatsApp video. It was a remarkably quick transaction and they were able to purchase the property at £175,000 less than similar properties in the same building. It’s now rented out on their behalf via our sister company Rash & Rash.
The properties that I normally source and encourage my clients to purchase for investment are existing period properties like the St John’s Wood example described above, which was built ca 1920s. I don’t recommend new builds or buying off-plan (properties that are yet to be constructed). Think new car, and the adage of it losing value as soon as you leave the showroom. I just find there is more value in an old existing property.
My prediction for 2022
I feel that apartments will see a renaissance and increase in activity in 2022. Yes, people have been working from home but many are now returning to the office, be it for part of the week or back full time. Furthermore, some may be finding their new commute to be too long which could all potentially lead to an increase in demand for the London pied-à-terre.
Central London property trend – key factors
- There is definite confidence in the housing market.
- Private outside spaces like balconies and terraces will make a property more desireable
- Older properties are less generic and have more character and this helps with future resale potential
- International travel is again open and those investors who still want to physically make a viewing can now do so.
- For those who can’t make it to viewings, it’s possible to do much of the search and viewing remotely, but be sure you use a property finder like me who’s on your side rather than the side of the estate agents.
- Houses have for sure been en vogue and have increased in price to an extent that apartments are becoming the cheaper option per square foot.
- Assets such as property tend to do better in periods of high inflation.
- Interest rates are likely to increase though because they are still at historic lows, I doubt initial rises will taper the market. For more on this, here’s an article I am featured in in the Evening Standard.
Get in touch if you would like to discuss the London market and are thinking to purchase in the near future.