Prime central London property market sees increase in stock and hesitant buyers
05-06-2012
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Rent levels have remained static and the supply of rental property priced between £1,000 and £2,000 per week has increased.
But there now seems to be a hesitancy amongst potential purchasers, according to Richard Barber, partner in residential sales at W A Ellis. ‘Sentiment is a strong driver of the market and nothing curbs potential purchaser’s enthusiasm more than the prospect of economic uncertainty and we have that in spades,’ he said.
He believes that more expensive houses are now being openly marketed, as opposed to being quietly, but unsuccessfully ‘placed’ over the Spring and there is good reason to be optimistic with regards London property. ‘It has proved to be an excellent long term investment and provider of steady rental yield, however this optimism must be tempered with a realistic view of the economic crisis which we are still very much amidst,’ he explained.
‘While there is still undoubted enthusiasm for prime property both from domestic and international purchasers, the perceived view that every property can command in excess of £2,000 per square foot is unrealistic. Indeed, I would caution against relying entirely upon rates per square foot as a means of valuation. It is a good check measurement but by no means the whole story. Guide prices should be carefully considered and justified,’ he pointed out.
‘A realistic seller should want to see two or three keen purchasers competing for their property, as nothing stigmatises a property and diminishes a vendor’s position more than a long stay on the market. In short, unrealistic vendors’ expectations and hesitant and cautious purchasers do not make for an active market,’ he added.
Lucy Morton, senior partner and head of lettings at W A Ellis, has seen a noticeable increase in families wanting to secure their homes earlier this year before the Olympics start and London goes into lockdown with traffic restrictions and an influx of visitors.
‘Families are taking properties a couple of months early in order to avoid what many believe could bring gridlock to some of our major routes. We are already noticing an increase of security awareness in London and this will no doubt only continue over the coming months,’ she said.
But the Olympic let market, which has been the talk of the town over the year, hasn’t really happened. ‘With some hotels now releasing rooms which they had held back, we do not believe there will be a rush of demand for short lets in central London over this period at all,’ she explained.
Rent levels have remained relatively static over the last month due to the nervousness in the market with the double dip recession. ‘It is quite apparent that the city corporations are still not bringing in expat middle management which has resulted in increased supply between £1,000 and £2,000 per week. The most competitive area of the market is the family house market where stock levels are low and demand levels high,’ added Morton.
