London house prices: property market in the centre of the capital emerging from 'Brexit coma'

https://www.theguardian.com/money/2018/jul/18/uk-annual-house-prices-rising-at-slowest-rate-for-five-years-ons

The moribund central London property market is finally emerging from a three-year “Brexit coma” as impatient buyers decide they have put their decisions on hold long enough, according to two reports this week.

Estate agent Chestertons says its analysis shows the epidemic of price reductions is easing as confidence returns to the capital, despite the continuing political uncertainty during the Tory leadership contest.

Its data found that there were 35 per cent fewer price cuts in the first five months of the year compared with the same period in 2018.

At the same time the number of home buyer registrations across the capital as a whole rose 18 per cent.

The biggest rise in demand has come in prime central London areas such as Chelsea, Westminster, Mayfair and Knightsbridge, where there has been a 32 per cent increase in the number of buyers registering.

Chestertons’ managing director Guy Gittins said: “With confidence comes an acceleration in activity — and that’s what we’re seeing as buyers shrug off the current political uncertainty and the London housing market starts moving again. This has been the most encouraging start to the year we’ve witnessed since the EU referendum result, and the change in buyer appetite is palpable.

“The direction of travel is clear. The recent upswing in buyer demand means it’s much more likely that a property will sell for its asking price compared to a year ago, as competition for available homes ramps up. And this is only the start. We know there’s a huge amount of pent-up demand in the market, and once there is greater clarity over Brexit, more buyers are going to be getting off the fence and flooding into the marketplace.”

Separate analysis from property investment fund London Central Portfolio (LCP) has also uncovered a “notable change of sentiment” over recent months.

It has recorded a 37.9 per cent jump in transactions during the last quarter — the biggest rise in more than two years — and suggests that investors are shrugging off “Brexit fatigue.”

Prices are also up, surging 13 per cent on a quarterly basis and 8.2 per cent year on year, according to the LCP data.

LCP chief executive Naomi Heaton said: “The ‘wait and see’ attitude, endemic since the EU referendum in 2016, appeared to start turning ahead of the Brexit deadline of March 29, with investors wanting to capitalise on weak sterling and discounted prices.

“While the extension of the deadline appeared to have initially dampened investors’ enthusiasm, there has been a notable change in market sentiment and several estate agents are reporting improved trading conditions. It would appear investors are no longer prepared to sit on the sidelines while the UK makes up its mind.”


https://www.homesandproperty.co.uk/property-news/london-house-prices-property-market-in-the-centre-of-the-capital-emerging-from-brexit-coma-a131546.html

How the tenant fee ban is changing buy-to-let

https://www.telegraph.co.uk/property/house-prices/mapped-area-england-wales-average-house-prices-100000/

The tenant fee ban is new to most of the UK, but has been in place in Scotland since 2012. Advocates of extending the ban throughout the rest of the UK pointed to the fact that rents in Scotland have not risen significantly in the intervening years.

While this may be true (depending on your definition of significantly), there are many differences between the housing market in Scotland and the housing market in the rest of the UK, particularly England.

Because of this, it might actually be easier and more accurate to set aside the Scottish housing market when considering what the tenant fee ban could mean for other parts of the UK.


The practicalities of extending the tenant fee ban

Not only does England have a larger population than Scotland, but, in much of the country, it also has much greater population density. This leads to increased demand for housing, especially rental housing and thus buy-to-let property investors who do remain in the market could well have more flexibility to raise rents than their northern counterparts.

They may also have more motivation to do so because one of the major differences between the Scottish housing market and the English one is that Scotland is exempt from the Right to Rent legislation, hence landlords can be more relaxed about setting up tenancies themselves and then using lettings agents for day-to-day property management.

Landlords in England, however, still have to think much more seriously about the personal liability they face if they either take in a tenant who does not have the “Right to Rent” or breach the Equality Act when undertaking “Right to Rent” checks. This may provide a compelling argument for continuing to use lettings agents and passing the cost on to tenants.


Landlords in England are selling up - sometimes fast


It’s also worth noting that many former buy-to-let property investors have exited the market over recent years and it seems likely that more will do so in future. While this exodus may not have been entirely caused by the prospect of the ban, it does have the impact of reducing the supply of rental property and/or reducing competition amongst landlords.

New research from Sellhousefast.uk looked at 10 of the UK’s key buy-to-let markets, namely Birmingham, Canterbury, Colchester, Coventry, Enfield, Luton, Manchester, Peterborough, Stockport and Wolverhampton.

It found that the area in which properties sold most slowly was Wolverhampton, but even here, the average sales time was just 138 days.

The area in which properties sold most quickly was Stockport, where sales took an average of just 104 days and this was closely followed by Coventry where the average sale took 124 days.

This is hardly surprising given that popular buy-to-let locations, by definition, are places where there is strong demand for property. What is, however, currently unclear, is whether these properties have been bought by residential buyers or by committed buy-to-let investors looking to expand their portfolios as, one way or another, this could have a significant impact on the housing market.


Mark Burns is the managing director of property investment company Hopwood House.

https://www.landlordtoday.co.uk/breaking-news/2019/6/how-the-tenant-fee-ban-is-changing-buy-to-let

House prices in London:pace of price falls slow in the capital while buyer demand fuels growth in the North of England

https://www.countrylife.co.uk/property/london-property/london-property-of-the-week-period-townhouse-in-notting-hill-24641

Market commentators believe London has seen the bottom of its market cycle and credits novice buyers for the improvement

The collapse in London’s property market is showing tentative signs of slowing, according to new research by Rightmove.

Over the past year to June, asking prices across London fell by two per cent, which is the smallest decline measured since January and an improvement on the 3.8 per cent decrease recorded in March.

The slight upswing is thanks to higher numbers of first-time buyers taking advantage of low mortgage rates and the market slowdown.

However, despite continual falls, the average asking price for a home in the capital still currently stands at £618,880, almost double the average of the rest of the country.

Outside London, record price growth in the active regional markets of East Midlands, North West, Wales, Yorkshire & the Humber helped to push the national average to £309,348. This is just £91 away from the market peak seen a year ago, with high levels of buyer demand nudging up prices in these regions.

The London overview

In London's most central — and most expensive areas — the average cost rose to £763,000, while in suburban areas, homes hit an average asking price of £516,000.

Homes in travel Zone 3 were the star performers ⁠— relatively speaking ⁠— with average asking prices up by 0.5 per cent over the past year. All other travel zones showed annual price drops.

“With average prices nearly £130,000 cheaper than in neighbouring Zone 2, the price momentum we are currently seeing may be down to buyers being priced out of the more central zones and having to accept a slightly longer commute to work in order to afford to buy,” said Miles Shipside, Rightmove director and housing market analyst.

But over the past year, only four boroughs saw positive house price growth: Bexley, Brent, Barking and Dagenham, and Waltham Forest.

The first-time buyer effect

Marc von Grundherr, director of Benham and Reeves, thinks London has seen the bottom of its market cycle and credits novice buyers for the improvement.

“Market conditions are currently perfect for first-time buyers due to low mortgage rates and stuttering house price growth and as a result, it is this demographic leading the charge in a market blighted by Brexit angst,” he said.

However there remains a gulf between wages and prices.

“Affordability is arguably the biggest drag on the market as, despite sluggish price growth as a result of Brexit, many still struggle to raise the capital required for a mortgage deposit,” he said.
“Couple this with the additional costs of stamp duty and legal fees and that initial barrier will always be the hardest thing to overcome when looking to buy.”

At a local level, agents in certain popular areas are seeing a return of first-time buyers with decent budgets and pent-up desire to buy.

Charles Mitchell, head of sales at Winkworth in Tooting, south-west London, says first-time buyers with up to £500,000 to spend are kick-starting the market.

"Over the coming year we expect to see a steady rise in activity in the lower end of the market."

He also hopes that buyers of more expensive properties "will also start to come out of the woodwork, in the belief prices won’t sink any further."

https://www.homesandproperty.co.uk/property-news/house-prices-in-london-pace-of-price-falls-slow-in-the-capital-while-buyer-demand-fuels-growth-in-a131276.html

New listings increased strongly in May, latest index shows

https://www.chestertons.com/property-to-buy/search-results/properties-in-london-to-buy/b-t-llondon/

Sellers returned to the housing market in May with new property listings across the UK up 9.2%, from 57,710 in April to 63,001, the latest index data to be published shows.

New supply in London was also up 7.9% with activity in the capital back after a difficult few months, according to the property supply index from Housesimple which analyses the number of new properties listed each month by estate agents across more than 100 major UK towns and cities.
Overall, some 80% of those towns and cities saw a rise in new properties coming onto the market in May compared to April. Warwick, Falmouth and Canterbury all saw new property listings rise by at least 60% in May, while new sellers were up by a quarter in the London borough of Hammersmith and Fulham.

Warwick was top with a rise of 68.2%, followed by Falmouth up 64.1%, Canterbury up 63.8%, Slough up 54.3%, Rotherham up 53.9%, Southport up 52.1%, Weston Super Mare up 50.5% and Guildford up 50.4%.

In London new listings increased the most in the borough of Hammersmith and Fulham, up 25.1%, followed by Brent up 22%, Kingston upon Thames up 21.9%, Hackney up 20.4% and Camden up 19.9%.

‘May was a strong month for new listings. Sellers looked to make the most of relatively calm market conditions and buyers continued to cash in on competitive mortgage rates. Parents will also be thinking about the next school year and this may spur on families looking to move and changes school,’ said Sam Mitchell, Housesimple chief executive officer.

‘Although Brexit uncertainty will return later in the year, the housing market experienced a late spring bounce in May as the Brexit extension removed short term uncertainty. There is now a window of opportunity for buyers and sellers to make the most of more stable market conditions in the weeks to come,’ he added.

https://www.propertywire.com/news/uk/new-listings-increased-strongly-in-may-latest-index-shows/

South East London prices set to outperform rest of capital

https://www.zoopla.co.uk/to-rent/property/london/south-east/

Property prices in south east London are set to rise faster than much of Greater London thanks to significant regeneration throughout the area, a new market research report suggests.

There are more than 31,000 homes are in the planning pipeline, with some areas set to see dramatic changes to their dynamics and streetscape, according to the analysis from real estate firm JLL.

For example, the masterplan at Canada Water and Surrey Quays will create a new urban centre, and a change of focal point which will significantly enhance its appeal and profile. The Old Kent Road corridor is also set for dramatic change. This neglected area, with the A2 as its domineering spine, has seen a spate of planning applications where an array of towers scattered along its route will alter the streetscape, skyline and demographics.

As well as these new changes, other parts of south east London, such as Greenwich and Deptford, North Greenwich and Elephant and Castle will continue to blossom into even more vibrant and appealing London neighbourhoods.

JLL points out that the area is also set to benefit from enhanced transport infrastructure. The proposed Bakerloo Line extension could be delivered as early as 2028 with the current preferred route extending the line from Elephant and Castle, down the Old Kent Road to Lewisham. This would significantly improve public transport access along the Old Kent Road where there is presently little tube connectivity.

‘South East London is full of characterful and contrasting neighbourhoods. From established enclaves such as Blackheath to fast evolving districts in Greenwich, Deptford and Elephant and Castle,’ said Graham Lawes, director of South East London residential at JLL.

‘It is also thrilling to see new neighbourhoods being planned and developed. Canada Water, for example, will see an even greater transformation as the British Land scheme takes shape, while the Old Kent Road area will change steadily as new developments spring up along this historic route into and out of London,’ he explained.

‘The plethora of new developments and the more modern feel to the area is also attracting new people into South East London, providing a greater depth of housing demand and in turn, a more eclectic mix of residents,’ he added.

According to Neil Chegwidden, director of residential research at JLL, certain areas, such as Canada Water and Surrey Quays, are likely to experience even stronger growth in the medium term.

‘As a result of the ongoing transformation of South East London, as well as the pricing advantage compared with many other more established and perhaps more fashionable areas of London, we expect residential prices and rents to grow at a faster rate over the next five years relative to much of Greater London,’ he said.

https://www.propertywire.com/news/uk/south-east-london-prices-set-to-outperform-rest-of-capital/

UK house prices:regional home buyers defy Brexit while London property market continues to drop

https://www.propertysecrets.org/index.php/tag/london-property/

The average price of a home in Greater London has been slashed by 2.5 per cent over the last 12 months.

London house prices continue to fall while values in the North and the Midlands are rising, significantly outperforming the South. 

The most buoyant market was Wales, where asking prices grew 4 per cent, followed by 3 per cent in the West Midlands, 2.6 per cent in the North East and 2.1 per cent in the North West, according to the latest Rightmove asking price index.

Rightmove analyst Miles Shipside said the majority of the UK had “defied Brexit" as buyers are more concerned with their own housing needs than with the country’s political chaos.

“Activity breeds activity and a greater choice of fresh properties in the likes of Wales helps to spur buyers into action, especially if they have a property to sell."

"This in turn adds another new listing that might then tempt another buyer, in a virtuous circle. And in much of the rest of the country, despite the ongoing political uncertainty, agents are reporting that the lure of the right property at the right price still attracts good interest,” Shipside explained.

Across the UK asking prices have nudged up 0.1 per cent over the last year to £308,290 with the negative London picture holding back overall growth.

House prices fall in London

The average asking price of a home in Greater London has been slashed by £16,157 (or 2.5 per cent) to £621,589 over the last 12 months to May.

Asking prices also fell in the South East (by 1.1 per cent) and were sluggish in the East and South West with 0.9 per cent and 1 per cent growth respectively.

Annual house price changes in London

All but two London boroughs have new sellers asking less on average than a year ago. Only Barking & Dagenham and Bexley — the capital's two cheapest boroughs — held their value year-on-year.

“Their housing stock gives some of the cheapest options for those with stretched affordability and on a tight budget but needing to be in London,” said Shipside.

Jack Kypri of Harpers & Co said: “I wouldn’t jump the gun and say that Bexley is doing amazingly well, but we haven’t slid like other areas, either – we’re holding firm."

"We have good quality stock and we’re like a mini, affordable Blackheath. We’ve got four grammar schools and great transport links into Charing Cross, but the place is pretty and full of nice wine bars and delis. It’s a pleasant place to live.”

“I think it’s because there is less talk about Brexit. Things have calmed down now; they all went away for Easter, the sun is shining, people are cutting the grass in their gardens, the country seems slightly less tense,” he added.

Cheaper, outer London — where great stretches of regeneration are delivering new homes — has performed better than the central zones with annual growth rate of 0.9 per cent to £522,351.

Asking prices in inner London were 3.8 per cent cheaper than a year ago with the average price now £762,044.

Marc von Grundherr, of Benham & Reeves, said: “it’s three-speed market with outer, more affordable areas doing one thing, luxury another and the mainstream market doing something different again.

“That said, here at the coal-face, we are seeing increased activity from potential buyers with applicant registrations up quite significantly year on year. We are now seeing the bottom of the London market, whichever one you pick.”

The time it takes to sell has dropped dramatically in the capital from 89 days in January on average to 74 in May.

“The time it takes to sell has sped up because asking prices have also fallen. Finally sellers’ expectations and prices are aligning,” said Becky Fatemi, founder of Rokstone Properties. “Now prices are more realistic the serious buyers are out looking."

https://www.homesandproperty.co.uk/property-news/uk-house-prices-regional-home-buyers-defy-brexit-while-london-property-market-continues-to-drop-a130536.html

Brexit: leaving the EU could help London's first-timers get on the property ladder

https://www.homesandproperty.co.uk/property-news/brexit-latest-eu-departure-could-help-londons-firsttime-buyers-get-on-the-property-ladder-a102336.html

As the referendum leave vote potentially causes the housing market to take a tumble, it could mean relief for first-time buyers trying to get a foot on the capital's property ladder. 

On Friday we got the decision Londoners very clearly didn't want. London is an open, cosmopolitan city that embraces diversity. I am proud to live here. This national turn inwards the vote represents has left many Londoners reeling and how we proceed from here will have deep  implications for the city's property market.

But importantly, this is not 2008 and the turmoil in markets could be good news for young buyers desperate to get on the property ladder;  the possibility of cheaper house prices combined with continuing historically low financing may be just the tonic they need following last night's shock.

The crash of 2008 was a cash-buyers dream. For everyone else it was a nightmare. London’s property prices fell by half and there were bargains galore. Unfortunately, the majority of Londoners had to watch from the sidelines.  Banks were in trouble and mortgages were hard to get. For those who could access lending, the prospect of sweeping redundancies stalled many buying ambitions. In the end it was investors from the UK and abroad who helped drive a steady recovery in the capital’s property market while much of the rest of the country’s property scene  stagnated.

This time will be different. Last night’s decision is not a global crisis, but a home-grown shock. There will be fall out, but how much and for how long depends on how well we negotiate our exit. If the Treasury’s Brexit forecast is correct, house prices could tumble by up to 18 per cent as a result of the exit vote.

This will not be welcome news for home owners, but neither is it a catastrophe. London’s house prices have seen double digit growth for years. Even a 20 per cent fall is likely to leave many Londoners only setting their price expectations back a year or so.

What does seem likely is that there will be no quick fix. Exit negotiations will take years. After that we need to see how we fare in our brave new world. No market likes uncertainty. Just the lack of clarity generated by the referendum vote itself caused the biggest fall in the number of people seeking to buy a property since the financial crash.

For London’s desperate buyers, a protracted cooling of prices could be the opportunity they’ve been waiting for. Mortgage rates are low,  and unlike 2008 financing looks set to remain available.  Should trouble arise, Governor  Mark Carney has already said that the Bank of England is standing ready to provide £250bn in additional funding to keep the system moving.

Further liquidity measures can also not be ruled out. All this should mean that if prices do moderate as the Treasury expects, all Londoners (not just cash buyers) will be in a much better position to pounce.

In contrast, our international friends may not be as keen or able to jump in. Immigration concerns were at the forefront of the exit campaign.

If this leads to a dampening of foreign demand for London living, it is likely to be another downward pressure on house prices – particularly in the prime districts. But this could also mean that Londoners' concerns about apartment blocks being snapped up by foreign investors and being left empty, will begin to dissipate.  This would be good news for buyers and renters alike.

Last night's momentous decision will impact London’s property market for some time. For property owners it is likely to mean a lengthy  period of uncertainty and challenge. And as we progress down what will be an unfamiliar road, things may get much worse before they get better.

However,  for those plucky Londoners who are willing to take the plunge, potentially more affordable housing alongside accessible and cheap financing may provide some welcome opportunities and relief.

https://www.homesandproperty.co.uk/property-news/brexit-latest-eu-departure-could-help-londons-firsttime-buyers-get-on-the-property-ladder-a102336.html