Demand to purchase London homes sees dramatic increase

Demand for homes in London continues to grow and our team of London estate agents is seeing enquiry levels increase at pace, especially as we move into the summer months – traditionally the busiest sales period for London properties.  We’re carrying out ever increasing numbers of market appraisals for sellers while the number of new buyers registering with us is rising dramatically too.  With properties selling quickly and market activity picking up, we urgently need more stock to meet demand, so we are keen to talk to sellers if they are thinking of putting their property on the market.

Buy-to-let investors a driving force

The soaring demand for London investment rental property is leading to an increase in the number of buy-to-let investors (both UK and overseas based) looking to expand their property portfolios, particularly in areas which have undergone significant regeneration.

The lifting of travel restrictions across the globe is creating an uplift in international demand which has been growing steadily over the last few months, with many of these enquiries from investors from China, Hong Kong, Malaysia and India. In fact, we recently carried out an extensive analysis of the number of London homes registered to overseas buyers and discovered that there has been a 4% increase, from 2020 (81,872 homes) to 2021(85,451 homes).  This equates to a total value of £59.3 billion in 2021 – a £6 billion increase from 2020.  An interesting and perhaps surprising statistic.

Find out more at Foreign buyers spend £6bn more across the London market (benhams.com)

The Crossrail effect

Of course, the newly opened Elizabeth Line (Crossrail) has been a prime driver of much urban regeneration, creating significant house price growth for those that invested early on.  The areas that have seen most benefit are often those that were previously overlooked in terms of transport links.

Crossrail has transformed these areas, acting as a catalyst for investment and development, with property developers building smart new developments typically favoured by London’s professionals – both renters and buyers.  Many of these are, in fact, new communities in their own right, with shops, cafes and restaurants, sports facilities, open green spaces and other amenities.

In fact, we recently carried out research that revealed that many postcodes close to a Crossrail station have seen house price increases of 79% since the project was first announced in 2008, carrying a 14% premium over the surrounding areas.

For a more detailed analysis of the Crossrail effect, read our latest research at:  Crossrail house prices up by as much as 215% since it was first announced (benhams.com)

New developments transform former brownfield sites in London

Many of these new developments are on former brownfield sites such as The Green Quarter in Southall, located on a former gasworks.   This development from Berkeley Group is popular with homebuyers looking for a quick commute to central London and the City – it’s also now a rental hotspot popular with London’s professionals who are looking for a high spec home and great amenities – at affordable rents.

In East London, Royal Arsenal Riverside, also from Berkeley Group, is another popular destination for buyers and renters, with its own Elizabeth Line station.  It’s just a seven minute commute to Canary Wharf and a 16 minute trip to Farringdon.   Again it has fantastic amenities, including shops, restaurants and sports facilities and our estate agents branch on-site here is seeing good demand from buyers wishing to purchase a property in both these locations.

Renters looking to get onto the first rung of the property ladder

A key trend we’re seeing in many areas of London, is the decision by professionals who are currently renting to make their first move onto the property ladder.    Managers of several of our 19 London lettings branches are reporting that the main reason now for tenants to vacate their current rental property is because they are buying their first home.

With rental demand so high, good rental properties are hard to find because of high renewals and low-supply in the new build chain causing chronic stock shortages, and this is pushing up rents, so buying a property is the next logical step for many, if they can afford it.  And, as interest rates are starting to increase slightly, there is a real sense of urgency to lock into a competitive fixed rate mortgage now, before the best deals are withdrawn and rates rise further.

Prime London market finding its feet

The prime London market is gradually finding its feet too, after a slowdown caused mainly by the impact of the pandemic and restrictions to foreign travel.  In particular, we’re seeing a revival of interest from overseas buyers who continue to return to the market. One fantastic property that stands out at the moment is a recent new instruction, a beautiful, £6.2m townhouse in Chester Row, close to Sloane Square.  It has five bedrooms and four bathrooms, as well as a media room, with a stunning central courtyard garden.  We’ve carried out a handful of viewings already but as you would expect at this asking price, the right type of buyer is sought.

Book an accurate valuation of your London property

With stock levels so low, we urgently need new instructions across London to meet growing demand from homebuyers and property investors.  So if you’re planning to put your property on the market soon, get in touch to arrange a free, no obligation market appraisal of your property.