On the Market - Notting Hill, Holland Park & North Kensington, Autumn 2012
Thu 20 Sep 2012
Keith Gorny provides an insight into the central London house market and explains how London will move on from a golden summer.
Despite the compelling distraction of the Olympics, the Notting Hill and Holland Park offices of Marsh & Parsons enjoyed an active summer market. While new buyer registrations were down and fewer viewings were taking place, the number of property transactions agreed was higher both year-on-year and compared to preceding months. Understandably, a number of prospective vendors chose not to launch broader advertising campaigns during this period, preferring instead to profile their properties discreetly through our network of offices. This trend may account for some commentators having misread market conditions.While stamp duty and associated charges have contributed to a reported cooling in price growth in the wider London market, our local market, particularly the higher-end house market, continues to show great resilience. Over the last few weeks we have achieved precedent prices for houses on Chepstow Villas, Kensington Park Road, Hereford Road and Lower Addison Gardens amongst others.
A growing diversity of overseas buyers continues to drive demand. However, the majority of high-value purchases in our area, which is devoid of the new-build developments preferred by buyers from the worlds emerging economies,continue to be conducted by British nationals. The next best represented group are Continental European buyers who live and work in London. In the majority of instances (contrary to popular perception) these buyers are purchasing their principal family home. While trouble in the Eurozone and Sterlings weakness has certainly contributed to demand, a greater lure lies in the less cyclical features of our Metropolis Londons cultural wealth, diverse professional opportunities and the excellent educational facilities.
The Olympic effect may produce a swell in demand, but given our areas long established, global brand status, I suspect that those with the resources required to buy in our area, did not need the Games to inform them of what our corner of London has to offer.
If you'd like further insight, about the Notting Hill & Holland Park property market, contact Director email@example.com
The autumn property market always encourages a flurry of new instructions and a plethora of enthusiastic buyers. Matt Biggadike gives his advice on making the most of this window of opportunity.
The key to selling is sensible pricing.Serious buyers are generally in tune with the market. Similar to Michelin star restaurants, the best properties continue to achieve top prices, however those that dont tick all the boxes have to be priced competitively to even get speculative buyers through the door.There is a fi ne (constantly changing) line between enough and too much, making it imperative to market a property at the true market value. And for the best chance of achieving the optimum price,sellers should make the most of the first few weeks of marketing a property.
As we move into mid autumn, its clear that those buyers who took time out to enjoy the summer are back in force; new buyer registrations are up too with a total of 12.5 buyers registered for every property. Smart sellers know this and have been quick off the mark. They know that if they want to sell their property before Christmas they need to act now. In reality there are just three months until the school holidays start and every year, as soon as December 1st arrives,the industry (apart from us!) starts to wind down,including solicitors and the banks Property prices in North Kensington and indeed in prime London have steadily increased this year, but as we enter a busier season, these rises should calm slightly. Property values will almost certainly not come down, there is still too much demand, but the signifi cant price rises we have seen over the past 18 months have now started to level off, which in my opinion, is healthy for the market as a whole.
If you'd like further insight about the North Kensington property market contact, Associate Director firstname.lastname@example.org
Adam Stackhouse gives further insight into the buy-to-let market proving that this asset class remains a key priority for investors
The London residential property sector offers a robust, steady asset class, that delivers or even exceeds our expectations in the medium to long term. There has been a notable resurgence in the buy-to-let market despite a pronounced shortage of competitive mortgage products and a harder qualifi cation process for buyers. Surprisingly however, and with little warning, this area of the mortgage market has recently improved with a far greater number of products now available. Surely a sign that confi dence is returning to the banking sector.
We have also seen an increase in the number of UK based, cash purchasers entering the market. The over 50s age bracket has reacted steadily to the continued decline in pension performance and have re-directed some of their personal wealth into London property. We have all heard of the Bank of Mum & Dad helping their offspring with a house deposit, but this new breed of investor is somewhat different. Historically, they have been patient with their traditional asset classes, namely stocks and shares,yet rewarded with very little growth in real terms. Logically then, they are seekingopportunities that deliver both regular, annual income, alongside the potential for attractive capital growth. Indeed, 34% of new homes purchases this year were buy-to-let investments.
So what types of properties are these individuals targeting? For once, it is not the high end luxury schemes, popular enjoy the summer are back in force; new buyer registrations are up too with a total of 12.5 buyers registered for every property. Smart sellers know this and have been quick off the mark. They know that if they want to sell their property before Christmas they need to act now.In reality there are just three months until the school holidays start and every year, as soon as December 1st arrives, the industry (apart from us!) starts to wind down, including solicitors and the banks with overseas investors and homeowners,and the reason for this is quite simply that many UK purchasers have been squeezed out. High net-worth, foreign buyers have acquired almost half of all newly built property in prime central London, where there is great tenant demand and a much stronger potential for capital growth. The over 50s however, are choosing the more boutiquey developments to invest their money. These style of properties are less about the lifestyle (they arent going to live in them after all) with no leisure facilities for example. Instead, its more about good quality property that will attract the best tenants, for the best rents.
They typically live outside of London but more than likely, have previously owned a property in the capital, so have first hand experience of the capital growth that can be enjoyed. They want to keep a finger in the London property market pie whilst also benefiting from a healthy rental yield.As with any property investments, we find that much of the success is down to timing. As this rapid expansion of prime central London continues, we are fi nding that intelligent, time-rich, UK domicile investors are intuitively spotting areas for future growth. They are targeting areas with renewed or extended transport links, local authority investment in quality open spaces and the value of properties in adjacent postcodes. All of these factors, if carefully analysed, reveal that savvy buy-to-let investors are still out in force, perhaps just a little smarter with their choices as they target investment performance over glamorous postcodes.
If you'd like further insight, contact Adam Stackhouse Head of New Homes & Developments email@example.com
The Olympics have come and gone, but their effect on the rental property market continues into the autumn.
By Patrick Littlemore
Prior to the Olympics, a number of landlords served notice on their tenants in the hope of securing a lucrative Olympic-let and its true to say, we let some incredible properties for great premiums. An example that springs to mind is a corporate let on Ladbroke Road to an American sports presenter for 8,000 per week a property previously valued at 3,000. However, demand for short lets during this period was not as exciting as some had expected. So, as the Olympic hangover comes to an end and the landlords who missed out re-market their properties, there is inevitably more rental property on the market. This is of course, added to the already high volume of property that naturally comes onto the market at this time of year.
In contrast, we have renewed 45% more tenancies in the last four weeks, compared to the same period last year a sign that tenants are deciding to remain in their existing accommodation for longer. With comparatively more property and fewer tenants, its no surprise that rental prices have stabilised. Landlords can now expect an average increase of 2.5% on a renewed contract; a figure lower than the rental increases achieved earlier this year, but when you consider the 15-20%, on average, rental rises in the last two years, its still a great time to be a landlord.
So whilst there is now a good selection of property for rent, the same can also be said for the large number of great quality tenants registered with our Notting Hill, Holland Park and North Kensington offices. We work with a number of London based, international companies via our Corporate & Relocation Services department, many of which placed a three-month embargo on London relocations in anticipation of high rental hikes and challenging moving conditions. Now the embargo is lifted, we have seen a significant increase in the number of search requests coming from relocation agents in the capital, looking to secure property on behalf of excellent corporate tenants.
The profile of a landlord in Notting Hill and Holland Park varies. There will always be a number of portfolio landlords as well as long-term buy-to-letters who own one or two properties. But more recently, there has been an increase in the number of young professionals, safe in the knowledge that their one-bedroom property is a solid capital investment offering a good yield, choosing to keep their first home as a rental investment and buying again, further out of the city. After all, there will never be a shortage of demand for one bedroom properties in the area!
Over the last few years families, wise to ever increasing rents, have tended to sign longer tenancy agreements. So with less turnover, there are generally fewer family houses on the market in Notting Hill and Holland Park. That said, despite the lower demand, those looking for a family house will consider North Kensington an excellent alternative, with far more choice, much more space and a slightly more attractive price-tag. Indeed, many of the tenants that initially register with our Notting Hill office find their dream house in North Kensington.Whereas earlier this year, there was a stark shortage of property to let and vast tenant demand, there is now a much more healthy balance of both property and tenants. I expect this to continue into the autumn market, with price increases to be more in line with RPI.
If you'd like further insight,contact Director of Lettings firstname.lastname@example.org