On the Market - Pimlico & Westminster, Spring 2014
Tue 25 Feb 2014
Jake Civardi looks at local property prices and the major factors currently influencing property sales
If I was to summarise the 2013 property market in Pimlico & Westminster, I would say that an extraordinary demand from motivated buyers was met with a chronic shortage of property for sale. And this imbalance has not eased in 2014. In fact, I can report that we have had the busiest start to the year that I have ever known with most properties being sold for the full asking price or above.This is particularly true for properties that are priced under 2m and therefore below the 7% stamp duty threshold.
We currently have 48 buyers registered for every property for sale through our Pimlico & Westminster office an increase of 85% compared with the summer of 2013! This statistic goes a long way to explain why prices are continuing to rise, especially in this part of London.
People often assume these price rises are beneficial for estate agents. The truth is, 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, where theres a healthy turnover of property to satisfy the buyer-demand.
In reality however, as long as prices are continuing to march forward, theres limited incentive for anyone in Pimlico and Westminster to sell unless they really have to, i.e. births, deaths, marriages or divorce. Those who dont fall within this category, are generally holding onto their asset to enjoy further capital gain. That said, those selling their property now, are benefitting from the high number of buyers looking and generally receiving a jackpot price. This demand will undoubtedly ease as more property comes onto the market in the traditionally busier Spring - at which time, as estate agents, we will be pleased to welcome a healthier, less fraught property market.
Pimlico continues to be a hot spot for investors - and its no surprise why. If you look at a map of the surrounding area, some of the largest building projects in London are in close proximity. Theres Battersea Power Station and the redevelopment of Nine Elms to the south, as well as the regeneration of Victoria Station and its surrounding infrastructure. This, coupled with fantastic transport links and a Central London postcode within easy walking distance of the West End, makes this area a prime piece of London.
Given this growing popularity, along with high demand from buyers, we are experiencing extraordinary capital growth. Indeed, we have just sold a first floor flat on St. Georges Square, for slightly under 1,500 per square foot. Prices at this level would have been saved for the likes of Warwick Square as little as a year ago. Additionally, new-build developments, especially in Westminster, are launching with asking prices in excess of 2,000 per square foot, which has undoubtedly spurred prices in the second hand property sector.
The buyer demographic of Pimlico and Westminster continues to reflect a more traditional market, compared with other parts of Prime Central London. Approximately 70% of the properties we sold last year, were to domestic buyers. In the last six months however, I have noticed a rise in enquiries from international buyers - most notably, from Asia (especially China). These buyers, who up until recently preferred new-build properties, have now moved into the second hand property market, with their requirements tending to be for a house or apartment in one of the beautiful, white stucco fronted buildings in Pimlico. In contrast to last year, over half of all the properties we currently have under offer, are with international buyers.
So how long will this last? As we continue to move through 2014, I believe a shortage of property to sell will continue to be the challenge. However, as prices increase, rental yields will decrease and this could encourage more property to come onto the market, which will help to create more stability.
Contact Jake on:
T 020 7828 8100
Chris Daly looks at the current demand from tenants, including the corporate sector, and why now is a good time to rent your property
Following an extremely busy year in 2013, the New Year started well in both Pimlico and Westminster, with a great number of tenants registering, complemented by a good number of rental properties coming onto the market.
The beginning of the year always brings a flurry of fresh corporate tenants, who are relocating to the capital with their employer. We have taken many enquiries from corporations who are relocating employees at all levels, ranging from graduates right through to chief executives and senior directors. Interestingly, in the last quarter of 2013 we saw a 16% increase in the number of new corporate enquiries compared to the same period in 2012 as well as an 11% increase in the number of searches with a budget of more than 1,500 per week. As a result, we have secured multiple tenancies with many large corporations in recent weeks.
In 2013, the Pimlico & Westminster lettings office had a 45% increase in business compared to the previous year. This can be mainly attributed to, firstly, the areas growing appeal to professional tenants, who appreciate the excellent transport links and closeness to the city. Secondly, a large proportion of the property we sell in Pimlico, comes straight back onto the lettings market. The increased number of rental properties, at a more affordable price than neighbouring Kensington and Chelsea, has ensured a steady flow of tenants to the area.
However, this upsurge of property coming onto the market, particularly at the beginning of last year, did result in prices softening slightly. And savvy tenants, who had resigned themselves to not being able to get onto the property ladder, to buy, were able to secure longer tenancies for lower prices. Given that there is now approximately half the amount of rental property on the market compared to a year previously, landlords can now expect their income to return to its previous levels.
The properties currently in the highest demand are the high standard one-bedroom apartments priced at around £400 per week, which are perfect for young professional couples or those needing a centrally located pied-a-terre. If these properties are spacious, with good sized rooms and dressed to a high standard, they are renting almost as quickly as they come to the market. Equally, the demand for family houses was extremely strong in the second half of last year and has continued into 2014. As a result, there is a significant lack of good quality houses on the market and this has pushed prices upwards. As always, the Pimlico Grid is extremely popular, but more recently, the modern developments with a porter, gym, parking etc, have emerged as a popular choice for tenants, particularly the corporate relocatees coming from abroad.
The Pimlico and Westminster rental market hasnt benefitted from the same price growth as the sales market in the last year however, with the area fast becoming a hive of activity with young professionals and corporate tenants. My advice to landlords is this: if you let your property now, youll secure a long-term contract, at a peak rental price.
Contact Chris on:
T 020 7828 8100