The London property sales market sees growing momentum

Demand for residential property across London continues to grow, with enquiries from both homebuyers and investors rising as we move into the second quarter of 2022.  We’re carrying out increasing numbers of valuations for sellers and enquiry levels are growing too, while many sales that were agreed at the start of the year are now completing.  So overall, this is proving to be a very positive start to the year for us.

After a difficult economic climate in the last few years that have seen Brexit, Covid and now the war in Ukraine, the UK property market remains robust and is going from strength to strength.  This only goes to demonstrate the resilience of London property as an asset class, confirming its reputation as a safe haven for investors in turbulent times.

Shortages of property for sale remains a challenge

We continue to see shortages of property coming to market, so our priority now is to take on new instructions to meet the current demand for homes across London.  At the moment, these are coming in prime central London and a number of newer communities and residential developments on London’s fringes such as Royal Arsenal Riverside in Woolwich The Green Quarter in Southall and Clarendon in North London. So while we are carrying out increasing numbers of valuations, we still need more new instructions!

Resale or second-hand properties also remain popular within our network of investors with Beaufort Park Colindale topping the leaderboard again for the third month in a row. Transactions here tend to be quick as we are on-site and have an excellent grasp of the local market.

Homebuyers’ priorities are changing

Homebuyers continue to move home for all sorts of personal reasons and there’s a real feeling that life is changing after two difficult years.  Some buyers are upsizing.  Some are downsizing.  And some are moving to a new area to meet changing requirements from their employer – many organisations are now encouraging their staff to return to the office so a shorter commute is once again a priority for many after a couple of years working mainly from home.  Others are looking for a second home or bolthole in London now they are spending more time in the office.

Domestic homebuyers still make up the large part of demand for London properties and, for these buyers, value for money is a priority.  Budgets are finite so, for example, a buyer may be happy to compromise on which floor of a residential building they will live on, or perhaps sacrifice a parking space, if that decision brings the apartment into their budget.

Buyers keen to fix their mortgage loan interest rates

Both first-time buyers and homeowners looking to move up the property ladder are keen to move quickly so they can fix a mortgage deal at current (still low) rates. So while we don’t expect the current, modest increases in interest rates to have a significant effect on homebuyer demand, the upward trend is creating a push to get mortgage deals fixed and completions done as soon as possible. But many buyers have saved significant sums during the pandemic lockdowns so now have larger deposits than a couple of years ago, so this is helping to cushion any recent rate rises.

Increase in enquiries from international buyers

We’re carrying out increasing numbers of property tours with international investors who are now able to make the journey to London to view properties in person.  We’ve recently carried out tours with investors from Malaysia, the Middle East and Dubai and most of these are looking to expand their portfolios in London.  Depending on budget, some are concentrating on prime central London, focusing on Zone 1, and postcodes such as W1 and W2, Paddington and Fitzrovia.

High profile developments such as Battersea Power Station and Nine Elms are of particular interest.  Some are looking at areas like Canary Wharf and Ealing, while for others, newer developments further afield in zone 4/5 where yields are slightly higher.

Existing investors rebalancing their portfolios

Many investors are also taking the opportunity to review and expand their portfolios.  Some have held London property for over 20 years, and having enjoyed significant capital appreciation, are now choosing to diversify, perhaps by selling a £2m apartment and instead buying two £1m apartments as buy-to-let investments, as they look to increase their rental yield.

Hong Kong buyers remain a driving force

We continue to see increasing demand from Hong Kong professionals looking to find a home in London, many of whom are moving to the UK under the BNO visa scheme.  Most are purchasing a property to live in themselves but we are also seeing growing demand for buy-to-let properties that will give a good long-term rental income.   They have sold their properties in Hong Kong and so are looking to invest in the UK.  The strong Chinese community at Beaufort Park in Colindale makes this development a real hotspot for Hong Kong homebuyers and investors.

Read more about international buyers hotspots in our blog Hong Kong homeowners most prevalent nation in 17 London boroughs (benhams.com)

Contact us for a free market appraisal of your London property

After such a positive first quarter to 2022, we urgently need new instructions to meet current demand.  Call our sales team or nearest international office to arrange a free market appraisal of your London apartment or house or discuss your purchasing requirements.