In 2011, the prime central London property market will again buck the national trend and remain stable.
The top end of the London market has become a free-floating entity, separate from the general UK property market and operating under different rules. In the UK’s regional markets (including non-prime London) property prices reflect the local economy because almost all house buyers live and work in the area, and most experts expect declining property values in the next year. However, buyers of prime property in central London are the world’s super-rich, and their buying patterns are influenced by international financial events rather than regional trends. And at the global scale, the outlook is much brighter.
The official government house price figures are in for October and they confirm what we at Sandfords have been saying for months - the prime central London property market is growing healthily.
Prices in the London Borough of Camden, which covers the eastern half of the Sandfords domain, rose by 2 per cent, the fastest monthly rise in the capital, says the Land Registry, the agency that regulates the property market. This equates to annual growth of 15.9 per cent. Overall, property prices in the capital rose by 0.3 per cent in October, an annual increase of 7.6 per cent.
Investors are returning to property, a vote of confidence in the long term strength of the market.
People looking to protect their nest egg are faced with an unenviable set of choices at the moment, with interest rates close to zero and inflation rising, so an increasing number are returning to buy-to-let in the expectation that prices will rise next year.
The prime central London market is bucking the trend and remaining stable. Our figures show prices are holding as demand continues to be strong and supply restricted.
Foreign buyers are continuing to come into London and the Regent’s Park and Marylebone areas are among their favoured destinations, which goes some way to explaining this remarkable resilience in the face of gloomy figures from the property market in the rest of the country. The return to profit in the financial sector is also contributing.
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The property market in Marylebone and Regent’s Park is holding up well, with transaction levels at least 25 per cent up on last year and prices remaining firm. The supply of good quality properties remains short, contrary to reports in the media of a flood of sales forcing prices down.
Prime central London is different from the rest of the UK property market because it attracts wealthy overseas property buyers and is also sustained by people working in the financial sector who are now seeing renewed growth and higher incomes. But it isn’t that different, so the disconnect between gloom in the media and the situation in the real market as we are experiencing it is striking.
We have just received a lovely letter from Teenage Cancer Trust:
On behalf of everyone at Teenage Cancer Trust we would like to say a huge thank you for all your support at the Marylebone Summer Fayre on 13th June 2010.
It was a thoroughly enjoyable day and the entire event has raised over £13,000 so far, with more money coming in, which is fantastic! We rely on the support of individuals and businesses like you to help raise the profile of the charity and generate the funding we need to build and support new specialist tennage cancer units in NHS hospitals. Our aim is to give every young person with cancer access to a unit by 2012 - which means we have to open another 13 units in the next two years.
The shortage of mortgage finance is pushing rents up, as would-be home owners are forced to rent because they cannot borrow enough money to buy.
According to the latest FindaProperty.com Rental Index, average asking rents in London rose 2.6 per cent over the past quarter and are now 6.4 per cent higher than a year ago. The number of properties available to let in London fell by 4 per cent in the last quarter alone, putting extra upward pressure on rents.
The Chancellor of the Exchequer has missed the opportunity to reform the property market in the emergency budget. The tinkering with capital gains tax, while not as damaging as we feared, will do little to help people buy the homes they need or invest in property to rent out. Meanwhile, stamp duty land tax with its market-distorting artificial bands remains in place, and the opportunity to reintroduce taper relief on investments has been missed.