Liquid error: wrong number of arguments (2 for 1) Buy-to-Let Landlords have Flooded London Property Market | Marsh & Parsons Sales and Lettings Estate Agents London

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Buy-to-Let Landlords have Flooded London Property Market

Wed 27 Apr 2016

Three in five property purchases in prime London in the first quarter (Q1) of the year were made by buy-to-let
landlords and second homebuyers. This has boosted the number of cash buyers in the capital, reports estate
agent Marsh & Parsons.Accounting for 36% of all property sales between January and March, buy-to-let investors
were the most prolific type of buyer across prime London. This comes as no surprise, however, as many
landlords rushed to complete on purchases ahead of the 1st April 3% Stamp Duty surcharge deadline.The
number of buy-to-let purchasers in the capital is up from 26% on the previous quarter, representing a sudden
reversal of the recent trend of lower investor confidence. Investor share of the market was in slow decline last
year, since peaking at 37% in Q4 2014.Those buying a second home became the second most prominent type of
buyer in prime London in Q1 2016. This buyer saw an even greater surge in market share over the quarter, with
second homeowners accounting for almost a quarter (23%) of all Q1 property purchases, up from just 14% in Q4
2015.Combined, buy-to-let landlords and second homebuyers accounted for three-fifths (59%) of all sales in
prime London. In prime central London, this figure was even higher, at 76%.Second homebuyers overtook
landlords as the most common type of buyer in prime central London in Q1, accounting for 41% of all property
purchases. Buy-to-let investors were not far behind, however, completing on 35% of all sales.Buy-to-Let
Landlords have Flooded London Property MarketThis rush has caused a much higher proportion of cash
purchases in prime London. Two-fifths (40%) of sales were made by cash buyers in Q1, up from 34% in Q4 2015.
In prime central parts of the capital, this rose to almost half (46%).The CEO of Marsh & Parsons, David Brown,
says: "Investors will always be the stalwarts of the prime London property market its the golden goose of capital
returns, and people are still clamouring for a slice of the action. But second homeowners really jumped to it this
spring too, and were much more prominent in the market than we would typically expect."But this was by no
means a typical quarter. Sales activity in the opening three months of this year has been exceptionally skewed by
the additional layer of Stamp Duty for both buy-to-let and second home purchases. Naturally, the knee-jerk
reaction among these groups has been to hurry through property purchases before the deadline, and make
savings while they can."He adds: "Now that the ruckus has passed, well see much more orderly transactions over
the summer months, as the market rebalances towards first time buyers and other owner-occupiers, for whom it
will just be business as usual."Over the past 12 months, buyer demand has jumped by 9% in prime London,
taking the number of registered buyers for every available property to an average of 14.However, levels of supply
and demand are moving in vastly contrasting directions in the capital. In outer prime London, buyer demand has
soared by almost a fifth (19%) since March last year, while in prime central London, it has dropped by 4%.
Similarly, the supply of homes for sale in outer prime London has fallen by 12% annually, while supply is up by
11% in prime central locations.Due to this chronic contrast in supply and demand, outer prime parts of London
are experiencing the highest levels of competition in the capital, with 16 buyers registered per property. In
hotspots such as Balham, this rises to 21.This fierce competition has fuelled a significant surge in house prices in
outer prime London, greatly surpassing the price growth recorded in other parts of the capital. In Balham, prices
have risen by 7.2% over the last year, and by 3.4% in the last three months alone.Brown concludes: "The market
is brimful of buyers, and nowhere more so than the poplar addresses of outer prime London. Theres still a
significant price premium to be paid for living in the central confines of our capital, and this has drawn certain
geographical battle lines for the next generation, who are increasingly focusing their efforts in outer prime
territories."For first time buyers and young professionals, these are the places where they can afford bigger
properties that offer them room to grow, and for savvy investors, these are the places where prices still have
room to grow too."Despite this latest research, there have been reports of the London property market running out
of steam.

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