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2016: a year of rebalancing in the Central London property market?

By Andrew Ellinas LL.B.Thursday, 17 December 2015

2016: a year of rebalancing in the Central London property market?

As 2015 draws to a close and we look ahead to the next 12 months, property commentators are gazing into their crystal balls for an indication of what the Central London property market will do in 2016.

The past 12 months have seen the Central London property market become more localised than ever before and this trend is set to continue in 2016, with buyers looking for the ultimate value-for-money in the present and appreciation prospects for the future.

“Despite what you might think, not every Central London neighbourhood is over exploited,” comments Andrew Ellinas, the Managing Director at Central London estate agents Sandfords. “There are still undervalued roads, enclaves and house types, and we expect buyers coming to us in 2016 to be more savvy than ever before.”

Ellinas thinks there will still be demand for the traditional favourites, likes apartments for sale in Hyde Park and houses for sale in Hampstead, but foresees areas like Swiss Cottage, Fitzrovia and Camden picking up in popularity. “The overall effect, we expect, will be a return largely to house price growth in Central London, albeit modest,” he adds.

House price predictions from industry specialists concur. The Halifax says prices could rise between 4% and 6% in 2016, while temporary inflation may occur in the first quarter of the new year as buy-to-let investors look to purchase and complete on properties for sale in Central London before 1st April 2106 (when the new higher buy-to-let stamp duty kicks in).

While some buyers will be put off buying in 2016 due to the change in stamp duty - both the new buy-to-let specific levy and also the fairly new bands that make £1 million+ purchases more expensive - some home movers are immune to such changes. It is thought these people will help fuel the Central London property market in 2016.

Much was made of international purchasing wealth in 2015, with Russian, Arab, Asian and European buyers choosing to make London their permanent home or investment of choice. Already Central London estate agents including Sandfords are noting a rise in enquiries from Iranian buyers, with expectations that sanctions against this Middle Eastern country will be lifted in 2016. Agents will also be watching the wider political and economic landscape across the globe as telephones tend to ring as soon as there is unrest or financial uncertainty.

Finally, we may be witnessing the end of the Central London ‘super basement’ era, with public sentiment waning for these major excavation works. The trend for digging deep to expand has prevented countless property sales, where owners have chosen to stay put and extend instead of moving. While the popularity of the basement may remain undiminished, the vast number of projects, and their related safety and disruption elements is being called into question. “We may just see a return to the old-fashioned scenario of moving up the housing ladder in order to secure a bigger, better property,” concludes Ellinas, “and that can only be a good thing for buyers and sellers in the capital looking for a more fluid market with better availability.”

If you would like more advice about the Central London property market, or wish to buy, sell or invest in property in 2016, contact estate agents Sandfords today for advice.

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