Whilst there have been reports in the press, about the difficult London residential property market, this isn’t entirely the case across the board.
It can be summarised by a dual market, with an under supply of properties up to £1m, and strong demand putting upward pressure on prices. However above this figure, there is little demand, which together with over supply, has resulted in a drop in prices.
This state of affairs is re-enforced by the latest UK Finance data for Q3, which shows that first-time buyers in London borrowed £3.31 billion, up 7% on Q2 and 9% on Q3 2016, to reach its highest level for a decade. It has been sometime since the market has been driven up by first time buyers.
The Chancellors’ decision to reduce SDLT for first time buyers, on properties under £500,000 in London, will only add to this price pressure. The higher end is slow and asking prices are being reduced to absorb the high rates of SDLT. For example, a £2m property bought as a second home equates to £213,750 Stamp Duty charge. Many would-be purchasers are looking to dig down, build out or covert their loft, rather than pay this, and other moving acquisition costs. Even for those looking to trade down, the punitive costs are making them think twice.
Affordability remains challenging in London, and outside the M25, the housing market shows little sign of faltering, despite the on-going Brexit saga, and the Bank of England’s decision to raise the base rate.
There is a lack of supply of good quality houses and as a result, there is a temptation to over inflate asking prices. To sell a property, it needs to be correctly priced and marketed to the widest possible audience, and even more so currently; through a carefully chosen, experienced estate agent, who will genuinely work the hardest, and explore every marketing avenue to secure a successful sale.
At our office in St James’s, potential buyers are able to discuss their requirements with professionally qualified staff, who can answer questions about prices, market conditions, commuting times and schools. We can then search the database for them and distribute brochures of suitable properties marketed by Butler Sherborn offices in Gloucestershire and Oxfordshire. We are in a unique position to harness these potential buyers with prominent street level offices, with large window displays.