On the Market - Little Venice, Spring 2014
Thu 13 Feb 2014
Natasha Mace looks at the different types of buyers fuelling demand in Maida Vale and explains why the Budget was good news for the housing market
The 2013 London property market was characterised by an all time low of available property for sale, coupled with a record number of buyers looking to secure a piece of London real estate. At the time of writing, we have 20 buyers registered for every property for sale in Little Venice - thats 54% higher than this time last year, and as a result, we have seen price rises for all types of property in the Little Venice and surrounding area.
On average, prices have increased by 12%, but this has been as high as 15-20% in areas such as Maida Hill, which has been playing catch-up over the past 12 months and closing the price gap on Maida Vale. More specifically, we have seen healthy price rises for the three-bedroom mansion apartments, which remain in constant high demand - and whilst prices were a little sticky at the million pound mark last year, due to the stamp duty threshold, we are now comfortably achieving prices of £1,075,000 or more.
We are seeing very few larger properties, suitable for families, coming onto the market. When they do however, they sell extraordinarily quickly and usually off-market. This is particularly true for the large maisonettes backing onto communal gardens, which are in such high demand, that a buyer will usually be found without the property officially being marketed. We can expect to achieve between £2 and £3 million for these properties.
I often hear people comment that these price rises must be good for estate agents. Well, there is of course some truth in this however, in reality, we dont want dramatic price rises any more than the masses of hopeful buyers trying to get a foot on the ladder. Our preference is for a stable property market, with a healthy turnover of property to satisfy the buyer-demand.
The demand from buyers is across the board. We have seen an increasing trend of first-time home owners opting to retain their first purchase as a rental investment. And why not? Its cheap to borrow money and as a landlord, you can enjoy a reasonably good rental yield, at the same time as capital growth. However, in some areas of Prime London, rents have softened and onward purchases are becoming increasingly expensive, so those trading up are now faced with having to sell their existing property to be able to compete in such a strong sellers market. Those opting to sell their property now are invariably trading up - either locally or to nearby Queens Park and Kensal Rise.
A good proportion of those looking to buy with our Little Venice office are already residing in the area and hoping to trade up however, 25% of the properties currently under offer with our office, are to buyers who started their search with our Notting Hill office. Now, more than ever, its important to work with an agent who can tap into neighbouring areas, especially at a time when there is limited property on the market and buyers are more likely to consider other location options.
There has been a rise in the number of first-time buyers registering with us - and many have substantial budgets for their first purchase. Some are being helped onto the ladder by their parents, who are confident that London property is a bullet-proof, tax efficient investment. There is also an increasing number of Europeans, who have rented locally for several years and now realised the investment opportunities on their door step. This represents a real cultural shift for European buyers, who have traditionally preferred to rent. More generally, we are still receiving plenty of enquiries from abroad, mostly from property investors. And were also starting to see the emergence of city professionals registering their interest in time for their anticipated bonuses due this quarter.
Whilst sellers choosing to sell their property now are benefiting from the high number of buyers and the possibility of a premium price, we expect this imbalance of supply to level out. I believe that rising interest rates, and therefore declining rental yields, will in time force more properties onto the market. This, combined with an seasonal uplift of more property coming on in Spring, will represent a welcome a shift in the market dynamics, which is welcome news for buyers.
Contact Rose on:
T 020 7993 3050
Sarah Warmington looks at the current demand from tenants, including the corporate sector, and why local rental prices look set to rise
Following on from a quieter last quarter of 2013, the New Year started with an increased number of tenants looking to rent in Little Venice, especially from corporate tenants who are relocating to London. This surge is not uncommon for the time of year, and experienced landlords who may have had vacant properties at the end of the year, held off to make the most of a more buoyant market. Properties are now hitting the market and attracting instant interest, which may suggest that prices will be encouraged upwards over the coming weeks.
Couples, single professionals and families are all seeking property, but it is the one-bedroom apartments that are currently in the highest demand. Tenants are tending to favour spacious reception areas, open plan kitchen/dining areas and outside space over an additional bedroom. For this reason, there was a surplus of two-bedroom apartments on the market at the end of last year, which in turn, led to prices falling. However, the two-bedroom properties offering equal sized bedrooms have continued to be attractive to professional sharers and, with an increase in tenant demand, we are already seeing these values bounce back.
We are taking enquiries from an increasing number of families who, having cashed-in on the great sales market in Little Venice, are now moving into rented accommodation until they find their next property. This increased demand and a general shortage of good quality, high-end family properties in Little Venice has led to stronger prices for the three- to four-bedroom properties.
Our Corporate & Relocation Services Department, who work with a large number of relocation agents and businesses in London have reported a 16% increase in the number of new enquiries in Q4 of 2013, compared to the same period a year earlier. This is especially true for the number of high-end corporate enquiries of £1,000 per week or more. We believe this is happening due to global companies relocating more senior staff, which is in contrast to just a few years ago, when these same companies were preferring to relocate their junior employees to save on ex-pat packages. Likewise, this movement is also contributing to the rise in rental property coming onto the market, whose owners are leaving their homes, and therefore London, to spend a few years as an expat abroad.
Our Renewals Department has reported an increase in the number of landlords looking to renew their contract at a higher rent but many are requesting more flexibility in the term of the renewal, in case they wish to sell their property in the future. The continued strength of the sales market in Little Venice has resulted in some very large price increases and so, the temptation to release their capital in a market where rental yields have softened, is starting to come to fruition. With this in mind, we may see rental price increases later in the year in line with a decline of available rental property in the area.
Contact Sarah on:
T 020 7993 3050