London market extremely active with record prices being achieved
The UK residential property market has experienced a year of two halves with prime central London and some of the Home Counties regions seeing an abundance of activity but other parts more subdued.
Mostly buyers have been adopting a cautious approach and 2012 is likely to see nervousness continue although it may encourage more investors, according to Philip Selway, managing partner of The Buying Solution, the independent buying consultancy of Knight Frank.
‘I believe that 2012 will be linked inexorably to the economy. A volatile stock market does create nervousness, however, at the same time it can encourage investors to look to property because it is deemed a safe bet in the long term,’ he explained.
In the Home Counties of Berkshire, Buckinghamshire, Surrey, South Oxfordshire and West Sussex, buying consultant Paul Frost, said that the north Surrey market has largely been driven by international money this year, in particular, Russian, Middle Eastern and Chinese buyers, mainly on the Wentworth Estate and St George’s Hill.
Meanwhile, there has been less activity above £2 million in the towns and villages that tend to attract UK buyers. There is still demand from buyers coming out of London, perhaps with the view to securing a property before the September 2012 school year, but there is not a lot on the open market.
‘Where there is property on the market, we often see an imbalance of around 10% between buyer and vendor price expectations; there is little pressure on sellers, yet buyers look at various factors, especially the global economy, and believe that prices are likely to fall, so unless they find their perfect house at the right price, buyers are prepared to wait,’ he explained.
In the Southern Region of the M3/M4 corridors covering Wiltshire, West Berkshire, Hampshire, Dorset and Somerset, Bobby Hall reports generally good activity especially in the £1 million to £2 million price bracket although some houses that were originally put on the market have only sold after dropping the price by 20%.
The most active part of the Cotswolds and Central area has been the section between Oxford and Banbury.
‘This area attracts more needs driven buyers who are usually moving due to schooling, but still need to commute into London. The improved Chiltern Line train service which has shortened train times by up to 10 minutes into London Marylebone has certainly made this area more popular, especially for those working in the City,’ said Jonathan Bramwell.
‘We are finding the Cotswolds market a lot tougher as there is less demand from discretionary buyers who are looking for weekend properties. Therefore, realistic pricing is essential towards achieving a successful result,’ he added.
The top end of the residential country estate market beyond the Home Counties has been slow this year although the situation has been different closer to London, where buyers have been predominantly international, according to Mark Lawson, partner, Country Estates.
But the London market has been extremely active with record prices being achieved.
‘A lot of people are investing in property rather than the stock market. They would rather have a 3% yield than invest in the stock market which has been so volatile recently,’ said Rachel Thompson.
‘Notably, buyers from the Middle East have purchased properties in the very best addresses to build valuable portfolios and these buyers are definitely not in the market to trade as these are long term investments. This means that the availability of property in Prime London addresses is contracting year on year, and this scarcity is also a contributory factor in price rises ahead of other market sectors,’ she added.