As 2022 began, the receding threat of pandemic disruption allowed homeowners and investors to resume their property buying activities. Business got back to normal.
January saw increasing demand from domestic and overseas buyers driving forward the market, with London’s high quality apartments and larger homes being particularly popular. Once again, these properties were selling at or beyond the asking price. A mini bidding war broke out in Hampstead and neighbouring Highgate, both popular north London locations, pushing prices up further. A desire for more space continued to be a driving force amongst buyers looking for a larger home, especially among professionals, conducting a post-pandemic revue of their lifestyle options. Properties in the £600,000 to £2.5 m + price range continued to be in high demand.
Our London property sales teams continue to report a pronounced uptick in deals compared to 2021 and even though interest rate rises caused by the mini-budget in September created a blip, this was only temporary.
With new PM, Rishi Sunak, calming nerves across the country, markets have settled and buyer demand has remained steady. Most buyers have taken the pragmatic view that the years of super-low interest rates have finally come to an end. Some, who already had mortgages agreed at low interest rates, hurried to complete – a micro trend that helped keep the market buoyant through some challenging months.
The UK political scene may have been in flux, but homebuyers’ plans to buy in London remains on course. The economic law of supply and demand continues to bolster prices and as mortgage rates begin to stabilise and indeed fall, the property market can look back on the turbulent summer months with some relief.
Overseas buyers have always been a driving force in the London property market and as normality kicks in, enquiry levels have been on the increase as on-hold investment plans become reactivated.
Indeed, after the September mini-budget, overseas buyers who have jumped at the opportunity to take advantage of the weak pound, find themselves being able to get substantial discounts (up to 20%) when paying cash for a property.
A much-anticipated first post-Covid international trip by our directors was one of the year’s key events. Visiting Dubai, Singapore, Malaysia and India, they were keen to meet new and existing clients for a series of well attended seminars and consultations. Investors who were keen to buy London property in the coming months were particularly well represented at these meetings.
Spiralling rental demand in London means that renting is becoming increasingly difficult for overseas students. Many of their parents have switched to buying London property as it makes sound long-term financial sense. This is because, with many of their children set to obtain a visa to work in the UK after university, a UK base is now a practical necessity. If the property remains empty, parents can always take advantage of London’s booming rental market.
We have seen a noticeable increase in interest from overseas buyers in the second half of the year.
A weak pound invariably attracts cash buyers, who are unaffected by interest rate rises. We have been fielding enquiries from investors from Malaysia, Hong Kong and South East Asia, keen to book viewing trips with us. These trips are scheduled for the New Year so the first few months of 2023 are looking particularly busy.
Hong Kong professionals moving to London have also been big drivers of property demand. Most are cash buyers, having already sold their Hong Kong properties, so are primed to buy a new home as soon as possible. North-West London is a particular favourite, particularly in smart developments such as Beaufort Park in Colindale, with its thriving Chinese community and amenities including a Chinese supermarket and restaurants.
Our China Desk manager, Penny Cheung, has been dealing with the demands of Hong Kong buyers who are responsible for nearly two-thirds of sales. The response has been so positive that Penny now organises seminars and advice clinics for recent arrivals. Enquiry levels at Beaufort Park have gone through the roof with offers being made on even unlisted apartments. Our team of Colindale estate agents has completed over 60 sales (as at the end of November) this year, topping the Rightmove chart for a second year in a row.
2022 saw the launch of the Elizabeth Line (Crossrail), creating vibrant new communities and residential areas, all along the length of the network. From Southall (The Green Quarter) and Slough (The Horlicks Quarter) in the west to Woolwich in the east, the launch increased the profile of many new developments. We recently opened a new branch in Woolwich, close to new development Royal Arsenal Riverside and we’ve seen demand soar there. Popular also with renters, these locations have been increasingly targeted by buy-to-let investors who anticipate strong rental yields.
Prime Central London locations took a sizable hit during Covid, so a return to normality is seen there as a win. As Londoners return to their offices, they have also regained their place at the heart of the City’s culture: namely, its restaurants, theatres and entertainment venues.
So demand for centrally located apartments, within walking distance of offices in Zones 1 and 2 is, once again, on the increase. For example, we achieved full asking price of just under £1.5m for an apartment in Canary Wharf earlier this year.
Fueled by interest from professionals and overseas buyers, Kensington and Knightsbridge are also experiencing something of a resurgence, but there are two relatively new kids on the Prime London block. With the high-profile opening of two new tube stations, Nine Elms and Battersea Power Station have excited plenty of interest, making them a hit with buy-to-let investors in particular.
Buy-to-let energy is also providing impetus for sales at Imperial Wharf, where investors are keen to buy second-hand flats that offer good rental yields of around 5%. These purchasers tended to be cash buyers, unaffected by interest rate rises, taking advantage of booming rental demand and rising rents in London.
“Business as Usual” – At first reading, that might not be the most inspiring mantra, but most London property professionals will take that as a net gain. It provides a strong platform for 2023 which is already looking forward to a number of international visits and strong demand from local buyers.
If you are thinking of either buying or selling a property in 2023, please get in touch with our sales professionals in one of our London branches or our international offices who can advise you on the current market and how best to make your move.
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