23
Feb
London: The epicentre of a property market recovery?
With the UK now out of the recession, it seems that the high-end
London property market has reasons to be cheerful as well with a
positive start to 2010. Indeed, Savills said that the market has
gone against the expectations that demand would fall while stock
levels increase.
London appears to be a shining light in terms of the UK property
market, perhaps indicating it is at the centre of some kind of
recovery in the industry across the country.
Figures from the organisation have shown that in January demand
relative to supply was 26 per cent above the 2003-2007 five-year
average for the same month. In addition, new buyer registrations
last month were 16 per cent above the monthly average from 2009,
with sales 20 per cent ahead of the January average for 2003-2007,
relative to the level of stock on the market.
Meanwhile, high-end central London house prices rose by 4.6 per
cent in the last quarter of 2009.
"The low level of good stock is really underpinning commitment from
buyers," commented Jonathan Hewlett, head of Savills London.
He added: "Many sellers are choosing to stay out of the market in
anticipation of further price rises and buyers clearly believe the
prime London market has a robust future. In the short term, this
dynamic will help sustain current values."
According to Savills, the south-west London market led the current
recovery process and saw demand relative to supply consistently run
at over 150 per cent ahead of the 2003-2007 average in the second
half of 2009.
"Here there are early signs of demand beginning to plateau. In
particular, higher prices - in some cases back to peak - have
encouraged sellers into the market and this has reduced stock
shortages," said Lucian Cook, director of residential research at
Savills.
Meanwhile, the Rightmove House Price Index for February 2010 has
recorded its highest ever average asking price for the English
capital, with property in popular locations remaining in short
supply, thereby supporting upwards price pressure.
The index also recorded the largest monthly increase in property
prices since April 2007, representing a year-on-year rise of 6.1
per cent. Average asking prices went up by £7,000 in February
to £229,398.
Sellers are asking an average of 3.2 per cent more than January and
Miles Shipside, commercial director of Rightmove, picked up on the
positive signs, not just for those in the high-end property market:
"A price jump of over three per cent is more comparable to the
pre-credit-crunch boom-times. Sellers are setting their sights
higher and some agents are going along with them in order to win
scarce instructions."
Mr Shipside had some advice for sellers out there as well: "With
finance still tight, properties will have to be beautifully
presented and keenly priced in order to convert this high level of
buyer interest into firmer commitment."
There was more positive news for the property market in general
this month, as figures from the National Association of Estate
Agents found that the percentage of sales made to first-time buyers
increased from 19 per cent in December 2009 to 23 per cent last
month.
A report from the organisation showed that the number of people
registering with estate agents to buy property also rose, from 251
in December to 291 in January, while the average agent sold six
properties in January compared to five in December.
These improvements came in spite of the inclement weather that
struck the UK and it appears that buyers braved the harsh
conditions in order to make purchases.
Commenting after the release of the report, chief executive officer
of Assetz, a group of property investment advisers, Stuart Law
commented: "We do expect the market to continue steadily forward
this year with a modest five per cent growth. While there are
plenty of risks left in the market overall, the market seems to be
dealing with those."