On the Market - Notting Hill, Holland Park & North Kensington, Spring 2012
Sat 21 Jul 2012
Keith Gorny provides his view on a market dominated by fierce competition amongst motivated buyers, overseas investors and record breaking prices.
Central London is a unique market. Compared to the slowdown suffered by most places outside the M25, prime spots of the capital continue to fare well. Areas such as Notting Hill and Holland Park have seen values soar as British and foreign buyers vie for the best property.
Its well reported that our local market has a mis-match between high demand and low supply. Over the last year this has intensified and our ratio of buyers registered to available properties has risen by nearly a third - currently an average of 15 buyers for every one property in our Notting Hill, Holland Park and North Kensington offices. Indeed, buyer demand for certain properties far exceeds this ratio. Our recent launch of a Kensington Park Mews house attracted over a hundred viewings in the first week of marketing before going to a sealed bid that produced several record breaking offers, comfortably in excess of the asking price.
Across all price ranges, buyers have been competing over the limited amount of property to have made its way onto the market in 2012. Very few of our areas owners are under any pressure to sell, so if their target price proves too ambitious, they will withdraw from the market and wait. This can be hugely frustrating for buyers. Successful buyers, in these testing conditions, need to develop a positive relationship with agents - now more than ever it's important to receive an early phone call when the right property pops up.
Notting Hill remains as popular as ever with a wide spectrum of buyers - most walks of life continue to be represented amongst our buyers. This hugely popular enclave has fantastically broad appeal offering the latest boutiques, eclectic cafes, uber-cool wine bars, trendy pubs as well as the occasional two Michelin Star restaurant.
It's not surprising that overseas professionals relocating to the capital are attracted to Notting Hill. In recent times the ranks of European and American buyers have been joined by more far flung nationalities - Mongolia, China, India, Kazakhstan, Russia and Brazil to name a few. Families universally adore the lifestyle offered by the grand houses with direct access on to the famed communal gardens; while well-heeled singletons and younger couples enjoy the buzz of centrally located apartments on vibrant side roads moments from some of the most 'happening' places in London.
Notting Hills rising value has helped increase the popularity of Ladbroke Grove and North Kensington which still provides comparatively more space for the money. North Ken, as it is known locally, is the preferred spot for those who want to stay in the Notting Hill area but where space has become the priority. While the gentrification of North Kensington is all but complete, further investment in the area should see it continue on its upward trajectory - rumour has it, a new Waitrose is about to open just off Ladbroke Grove!
The long gentrified Holland Park has the more sedate reputation of the three areas and boasts some of the best houses in London. Even here, in the most established of areas there is room for above-trend positive growth with several new developments coming to fruition. The Design Museum is moving into the former Commonwealth Institute and high specification apartments will be part of the scheme. Across the road, a redevelopment of the cinema will also bring new homes to the area directly opposite Holland Park. In addition, new apartments are already under construction next to Holland Park Comprehensive. All of these new properties and their new owners will boost the areas already lively cafes and restaurants, while relieving some of the problems connected with the shortage of stock.
I anticipate continued demand for these three hotspots in 2012. The continued weakness of Sterling and political uncertainty elsewhere will continue to encourage overseas investment in our safe haven area.
The stamp duty hike represents a financial kick in the teeth for prime buyers, but it shouldnt derail the market.
by Peter Rollings
The prime market has absorbed stamp duty increases in the past, and given the current level of buyer demand, it will weather the storm in the long-term. While the added cost may affect some buying budgets, most buyers looking to purchase property for over 2m are unlikely to put their lives on hold and abandon their house-hunting altogether - despite facing an additional cost of at least 40,000. However, in practical terms, its likely to create price bunching around the 2m threshold and demand for homes just shy of 2m will be even stronger. At a time when the government should be doing all it can to encourage the property market, adding financial obstacles to the only part of it that is flourishing is a questionable move to say the least. The affects of the tax hike remain to be seen over the next few months and needless to say, we will be monitoring what affect, if any, it has on the higher end of the market.
Patrick Littlemore talks about the Notting Hill, Holland Park & North Kensington markets and provides his advice to landlords and tenants in the current market
"You live where you land" says an Australian friend of mine who somehow ended up in west London after travelling around Europe. It certainly seems that once someone gets used to a particular 'village' in the capital, they stick with it. Rather than move to another part of London, a new arrival settles in a particular area and upsizes to a bigger rental home when a partner, and then perhaps children, come along. And if you cant find what you want for your budget, you step out a ring.
And so it goes in Notting Hill and its surrounding areas. Those wedded to this vibrant part of London might move out of the core sector, sidling off to the west side of Portobello Road for instance, yet stating they're still in Notting Hill. Over the last year, we've witnessed more and more tenants migrating to North Kensington for the same reason, particularly as prices have increased substantially in the Hill itself. As a result, rents in North Kensington are also being pushed upwards - almost 30% of the prospective tenants who registered with our Notting Hill office ultimately found property listed with our North Kensington office.
A difficulty over the past twelve months, which looks set to continue this year, is that these coveted zones are not blessed with a surplus of rental property. Along with most other parts of central London, tenants are staying put and renewing contracts where they are already renting. This leads to fewer properties for new incoming tenants and increased competition. That said, the spring market is starting to bring more property onto the market, which we hope will help ease the stock shortage for tenants looking to secure property during the traditionally busy summer months.
My advice to tenants is, and always will be, book viewings for a good selection of property and then sharpen your pencils so you can get your offers in quickly. Quality property at the right price will shift almost as soon as we take it on, so dont hesitate if you spot something you like.
Also, I predict interest from overseas tenants will persist, if not increase, as they favour renting over buying at a time when they - and the companies that employ them - don't quite know whats going to happen in the market. Until things settle down somewhat in the Eurozone and the economy looks rosier, many will believe it makes sense to leave their options open and carry on renting. And the place chosen is probably going to be where they landed when they first touched down in the capital.
And finally, my advice to landlords wondering whether to kick out existing tenants for the three-week Olympic period, is to think long-term. Unless youre set up specifically for short-lets, it might not be worthwhile packing up your personal belongings and investing in the necessary safety checks for such a limited time. If the scenario of three people chasing after every one home continues, a longer let certainly makes sense.