Market Advice from a London Buying Agent

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Understanding what the property market is doing can help those considering buying or selling to make an informed decision. There is still plenty of uncertainty surrounding the property market, and this is naturally having some impact on prices and the availability of funding for those seeking mortgages.

That said, the current position of sterling against other currencies is enticing prospective buyers back into the market in certain sectors, such as Prime Central London and other high-value areas. This is especially true amongst overseas buyers, despite some natural concern that prices may dip.

Increased Demand but Slower Sales

Following the vote to leave the EU, statistics measured in the eight-week period following the vote by Knight Frank, showed a 19% rise in the number of properties under offer and an almost 50% increase in viewings in London properties. This is despite a Savills calculation that Prime Central London property prices are likely to go through a 9% fall this year.

One London buying agent, however, reports that many of their clients are considering whether their property purchasing decisions should be put off until a later date. No one can answer the question with any degree of certainty, only drawing on past experience and intimate knowledge of how the property market reacts to the general financial climate.

Theresa May’s recent conference announcement regarding the triggering of article 50 by the end of March next year, indicates we have a couple of years to wait before there can be any certainty regarding how property prices will behave. Savills predicts flat prices over the next couple of years, then a strong recovery from 2019 onwards.

The uncertainty is having the effect of more prospective vendors choosing to let properties rather than sell. And on the other side of the coin, low interest rates continue to ease financing pressure for borrowers.

Pressure on Developers

The general uncertainty has prompted some property developers to rethink their planned projects. Some have responded by redesigning developments so they contain a high number of smaller units, since there is a falling demand for more expensive, larger homes.

Examples include Northacre’s New Scotland Yard site which had originally planned 268 apartments, but which is now redeveloping to include 295. Similarly, the Battersea Power Station redevelopment originally planned 3,444 homes, but is now hoping to add an extra 409. It is doing this by reducing the number of three- and four-bedroom units on offer.

The New-build Secondary Market

Smart investors always find opportunities regardless of the surrounding market conditions, and one such opportunity lies in what one buying agent has identified as the new-build secondary market.

In the current housing market, some buyers originally intending to buy off plan have paid deposits and possibly made several stage payments, but run into difficulties making subsequent payments ahead of completion. An alternative scenario is where off plan purchasers have made a profit on paper that they wish to realise. Both reasons for selling can lead to investment opportunities.

Investors Should Look for Opportunities

There are always investment opportunities around if buyers know where to look, and the best advice is still to be prepared to make a fast decision and move quickly when opportunities arise.

No one can say with any degree of certainty exactly where the bottom of the market will fall, but in considering only high quality developments, any additional supply is unlikely to depress prices too far.

By delaying a buying decision, prospective investors risk waiting too long then finding the best properties are sold when prices start to rise once more.

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