Market Comment

At dinner parties - being an estate agent is a bit like being a doctor. As soon as I introduce myself as an agent, the first thing I’m asked is “how much is my property worth”, in the same vein that a doctor is likely to be asked about a nagging joint pain as soon as their profession is disclosed! Well, I do a lot less valuing of property these days, but I do, as most of my readers are hopefully aware, keep a very close eye on the London property market and pride myself in knowing what prices are doing. Of course, I’m not for one minute comparing my expertise to the heroism of the medical profession – but property is my passion. I live and breathe it every day. So here’s a little bit about what I think is going to happen this year – and the reasons for my predictions. And……if you do want to know how much your property is worth, you know where to find me!

The Autumn market, which begins every year in mid September, is traditionally our 'second busiest' time of the year after the Spring and, perhaps surprisingly, given the never ending torrent of bad news that appears to be coming from every media outlet at present, it has started with encouraging signs.

I have banged on about what a unique place London is for many years and so far I've been right. The market has always had its seasonal variances - and yes, August in Central London was unsurprisingly quiet (but not so quiet that we didn't agree well over 100 sales transactions and over 350 lettings transactions) which wasn't helped by the unusually early Ramadan this year. A large number of those who observe this religious period, and who traditionally visit London in August, delayed their trip because the long days during the British summer make it very uncomfortable having to wait until 9pm (at least) to eat. London was therefore bereft of a substantial number of buyers from both the Middle and Far East. We have however, already seen signs that this portion of buyers are returning to London this month, and beginning their property searches.

I say it every year, and it’s true. August really is a state of mind. While many of our competitors are taking it easy during the summer holidays, our sales teams at Marsh & Parsons will be making the most of an 'active August'. This time of year represents the peak for the lettings market but, like every year, things have slowed somewhat for the sales market. Activity on just the sales pages of the Marsh & Parsons website however, remains energetic at a steady 90% of it's usual performance. An indicator that there’s still plenty of buyers out there looking to secure London property.

In my last blog I said there would be a 5% rise in central London house prices in 2011, which is in contrast to many of my competitors, who predicted much lower increases (and in some cases reports of declines!). I was wrong and uncharacteristically, I’m going to admit I was over-cautious. House prices have already increased by between 5-7% and will continue to do so this year. My latest blog gives my indications as to the extent of this rise. As always, I hope you enjoy the video and welcome your comments and observations about the London property market.

Click here to view the video blog.

With the average age of a first-time buyer in London reportedly having reached a record 43 years old, (article) it is little surprise that the demand for rental property is surging. The usual seasonal increase in the number of tenants looking for property in spring/summer has been further fuelled by the 'would-be' buyers who are being forced to rent, either due to being unable to secure financing or because they are struggling with the lack of choice on the sales market. Meanwhile the volume of properties on the market in Central London has steadily decreased over the first four months of this year, resulting in a real shortage of rental property; in most areas, stock levels in April 2011 were down by an average of 20% compared with January.

At the beginning of the year I predicted a 5% rise in London property prices for 2011 and after the end of the first quarter, I can report on average, a 5% increase has already taken place, particularly in the 'house' market.

A growing economy and a handle on the budget deficit has encouraged home buyers to start looking again. With demand so high, and such a lack of new properties coming onto the market, it's no surprise that prices are rising so quickly – in some areas of London we are seeing as many as 28 buyers registered for every available property. Incidentally, March was one of Marsh & Parsons best months since the glory days of 2007.