Intellectual Property - Shoreditch, Autumn 2015
Mon 28 Sep 2015
Local Sales Market Update
Famed for its diversity in arts, music and culture, the Shoreditch property market is demonstrating equally unique characteristics. Whilst other parts of London experienced a quieter summer, the number of buyers registered with this office increased steadily month-on-month throughout 2015, and increased by 38% from August to September alone. And now, as the autumn leaves begin to fall, sales activity in Shoreditch holds strong with 33 buyers currently registered for every available property for sale.
During this period, we've noticed that the three most prominent types of buyers include young professionals/first-timers moving across form the local lettings market, local up-graders/growing families, who have more substantial budgets, and a strong buy-to-let investor market coming from all parts of London and beyond.
Once graduates have established their careers with nearby, esteemed professional services including popular finance and law firms, many are ready to purchase their first property, usually by their late 20's and early 30's. When the time comes to make their first step on to the property ladder, these young buyers are determined to reside locally to maintain their social, cultural and transport connections. Just this week we sold a contemporary two-bedroom flat on Kay Street to a young professional couple who had been renting with us for some time. Exchanging at the full £575,000 asking price, these buyers certainly had their hearts set on a local move within Shoreditch. This is typical of our first-time buyers, who predominantly have budgets in the sub-£600k price bracket.
Understandably, the Shoreditch lifestyle is captivating all demographics, so its no surprise that our second most active buyer group are locals who have progressed up to more established careers, and with growing families, they want to upgrade to properties within the area that benefit from gardens and/or extra bedroom space. Typically, their budgets range from £700k to £1 million.
Finally, savvy buy-to-let investors represents some 40% of our overall demand. Excellent yields of 4-5% can be achieved, and capital growth is growing with the Shoreditch skyline, which we believe is set continue. Indeed, for those who have been pushed out of central Shoreditch, Bow and Mile End offer a great alternative. Both are more affordable, but with such easy access to all that Shoreditch has to offer, buyers are being increasingly tempted in that direction. Equally, we've seen a 15% rise in capital growth in Hackney, and the overall price per square foot now sits £840 compared to £950 in central Shoreditch. But when you compare either of these numbers to the average £1,200 in central London, and its 1-2% rental yield, you can see why investors continue to flock here.
With demand as high as it is, prices are currently very strong, and you might be surprised find out how much your property is now worth. If you'd like an up-to-date (no obligation!) valuation, we'd love to hear from you.
Mark Kempson, Shoreditch Sales Manager
Shoreditch, the area that never sleeps, always abuzz with activity and the same can certainly be said for the lettings market. Since February, we've been achieving some excellent results for our clients. Our supply and demand ratio has increased steadily throughout the year and this peaked in September to eight tenants registered for every available property, which compares to just six in August and three in April.
With many universities in the area including; LSE, Goldsmith, UCL, Queen Marys, Kings collage and Imperial college, just to name a few, its obvious why so many students choose Shoreditch to live. Demand for two-bedroom properties between 400-450 per week has remained strong, as many students hope to secure a place before Christmas. A good proportion of the students are supported by the bank of mum and dad with many fortunately having excellent budgets, and offering payment in advance to make themselves more attractive in this competitive market.
Conversely, weve seen an increase in demand from young professionals looking in Shoreditch due to its proximity to both the city and their offices. These tenants are very attractive to landlords, because they work a "revolving door" schedule and as a result spend very little time in the property, thus minimising the overall wear and tear. Their requirements range, but very often they desire converted warehouses/churches and exposed bricks for that contemporary yet industrial look". However, with the recent and up-coming plans for the Canary Wharf-isation of Shoreditch, some opt for the more readily available new builds due to their security and overall affordability. Consequently, the upper floors of these developments are in high demand as they arguably offer some of the best, unobstructed views in London.
Overall, and due to its increasing popularity, the higher end of the Shoreditch lettings market has now become more active in the £725-£1,450 per week bracket. Our Corporate & Relocation Services Department has been especially busy responding to interest from international tenants, who are relocating to London for work and want to live here. Recently, there has been a rise in demand from Americans looking to move to this area, with many comparing Shoreditch to New York in terms of cultural atmosphere, look and feel. Landlords, wise to this shift, are refurbishing their properties in order to attract these corporate tenants.
With excellent connections to the City and a perfect balance between work and play, Shoreditch is fast becoming one of London's tenant hot-spots. Theres a real sense of community with a unique art scene and a weird and wonderful array of privately owned boutiques and coffee shops. Its no surprise that so many have placed it at the top of their list when looking for their next move.
William Copeland, Shoreditch Lettings Manager