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The general picture is one with which you
will, by now, be familiar: London has a great shortage
of supply, huge demand thanks to City workers with handsome
bonuses and prices are rising exponentially. There is
much truth in all this. At the time of writing, overall
stocks of available residential property in central London
are 28% down on last year, whilst some of the prices we
are achieving in the prime areas are at least 20% up.
Demand shows no sign of slackening and, perhaps most remarkably
of all, investors are continuing to buy, despite the inevitably
low yields that result from such remarkable capital growth.
Yet in fact – as our canny investors know –
this broad view hides many complexities of which it can
pay to be aware.
To begin with, the variance in capital growth needs to
be appreciated. ‘Floating’ a guide price 25%
above last year’s for a genuinely A1 property in
Holland Park may be worthwhile, but try the same in Kingston-upon-Thames
and you’d be wasting your time. Echoing our experience
of this, recent Land Registry figures show capital growth
in both Westminster and Kensington & Chelsea running
at, for example, over three times that of Greenwich (and
double that of Kingston). The City bonuses story, too,
is more complex: few buyers come in proudly brandishing
huge bonuses and the impact of these ‘one-offs’
tends to be over-played. In our market at least, the impact
of the City lies more in general increases in recruitment
(at all levels) and steadily rising, secure incomes. This
is what is driving the relentless demand. It is also why,
as you move away from the City itself, so the nature of
the most ferociously fought-for properties shifts from
bachelor pads in Clerkenwell (and almost anywhere along
the Central line) to luxury family houses in Weybridge.
Above left: Wimbledon SW19, £750,000
guide
Left: Holland Park W8, £2 million
guide
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Whilst it is true that everything is selling
at the moment, it’s the properties that can most
obviously ‘tick all the right boxes’ that attract
the really intense competition (and thus the greatest
price hikes). For buyers, this means it is worth taking
a leaf out of the investor’s book: look closely at
running costs, maintenance and location factors. Sometimes,
apparent turkeys can turn out to be gems (and vice versa).
Sellers, meanwhile, should consider the cost of giving
the market what it wants. Decoratively speaking, incidentally,
this is shifting a little. Having been pure minimalism
and wooden floors everywhere for years, we are now seeing
a greater emphasis on lighting, on the use of ceramics
(on walls and floors) and on colour.
That said, a return to ‘full-blown swags & tails’
still seems a long way off. Practicality with a touch
more warmth and a dash of creative lighting seem to be
more the order of the day.
Present market conditions are likely to become a little
less pressured over the coming months – but not much.
For buyers and sellers alike, this means that understanding
your market, and your position within it, is even more
crucial than usual. We would, as ever, be delighted to
advise.
Above right: St. Margarets, £1.795
million guide
Right: St. Margarets, £1.8
million guide
Below right: Hampton Wick, £750,000 and £895,000
Below: Kensington SW8, £1.95 million guide
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