LONDON MARKET COMMENT
Turning point?
Since the end of March 2003,
the number of would-be buyers registering each month with
our central London offices has risen by exactly 50%. Over
the same period, the FTSE 100 has gained (i.e., recovered)
by over 50%. Incomes in the City are reported to have
risen dramatically, whilst house prices have barely moved.
Having been subdued since the summer of 2002, and especially
tough in 2004, is the central London market now turning
the corner?
According to recruitment consultants Morgan McKinley,
average City salaries rose by 10% in the first six months
of 2005 alone, with senior managers doing even better.
No surprise, then, that our staff have seen a welcome
upturn in both demand and sales agreed. The London Olympics
announcement has also given us a lift, especially as the
extent of the benefits to the capital as a whole, including
its transport systems, emerges. Finally, the advent of
residential Self Invested Personal Pensions in April 2006
is, as expected, nurturing renewed interest from investors,
many of whom are further encouraged by interest rates
which appear to have peaked at or below the level most
commentators anticipated.
Top left: Notting Hill W11,
£3.95 million guide
Top right: Richmond, £1.35 million guide
 |
|
Nevertheless, confidence ‘on the street’ is
still not what it should be and it would be premature
to say that we have definitely turned the corner. The
reasons for this are not yet clear. Terrorist attacks
hit the summer tourist market and haunt us still but,
at the time of writing at least, the FTSE has bounced
back from its reaction and London seems to have ‘resumed
normal service’. As we have asserted before, we also
think that the London market is affected by its own echo,
as news of phases through which it has already passed
are reported back from the shires. It is, of course, quite
possible that events originating far from our shores,
too, are generating nervousness closer to home. Most obvious
of these is the price of oil, which has more than doubled
since March 2003, when, at just under $31 per barrel,
it was already regarded as being a little high for comfort.
This huge increase will doubtless subdue growth overall,
but how much it is influencing our customers now, if at
all, is hard to say.
Even taking such negatives into account, however, they
do not amount to much in the face of the value that is
available today, the rising incomes and improving market
environment. It may simply be that confidence, lost so
quickly, takes a long time to win back, so you have to
be a long way into a recovery before the mood ‘on
the street’ reflects its existence. This is certainly
a scenario that those who have stayed out of the Stock
Market since 2003, will identify with.
Above: Teddington, £775,000
guide
Above left: Wimbledon SW19: £850,000 guide
Left: Pimlico SW1, £450,000 guide
Below left: Chelsea SW3: £750,000 guide
Below: Knightsbridge SW1, £595,000 guide |
