On the Market - Pimlico & Westminster, Autumn 2012
Thu 20 Sep 2012
Jake Civardi provides an insight into the Pimlico property market and explains how London will move on from a golden summer
Despite the traditionally quieter summer market, Pimlico & Westminster saw fairly normal trading at the mid to lower end of the market, where buyers were determined to secure a property before the autumn rush. The family market however, chose to either bed in for the golden summer or escape to a far-off shore and as a result, we saw demand drop from 37 buyers per property in Q1, to 24 in Q2. With more property coming on to the market now, particularly at the higher end, this has further declined to 19, but still what we would consider to be high buyer demand.
When I look back to where we were a year ago, much has changed. Pimlico has benefited hugely from the south west shift, where traditional buyers in neighbouring areas have been priced out. They now see Pimlico and Westminster as a viable alternative to places such as Kensington and Chelsea, which would have been unthinkable as little as five years ago. The gradual improvement and gentrification of the area has been perfectly timed (although perhaps not intentionally) to coincide with some of the lowest levels of available sales property ever seen in the capital, as well as the uncertainty lingering over the eurozone. Without realising it, Pimlico & Westminister has played a canny game of catch up and is now reaping the benefits.
This is reflected in the change of buyer demographics. Traditional first-time buyers have been priced out of the market and replaced with buyers who need to be financially supported by the bank of Mum and Dad. This is not a new phenomenon, however the baby boom generation are retiring thick and fast, so this facility is becoming accessible to more young people. With traditional banking products and low annuity rates offering poor returns, property in Pimlico & Westminster is a great alternative investment. In addition to the capital appreciation of property, parents are of course, helping their offspring to get a foot on the ladder. And if they decide to charge them rent at the market rate, they can expect a generous yield.
We now have seven offices in the neighbouring Royal Borough, which gives our clients properties access to a huge extended network of buyers who are right on our doorstep. In fact, just in the last few weeks, we were helping a couple find a flat in Chelsea. Unable to find what they were looking for, our negotiator showed them a whole house in Pimlico for the same price 2million. Located just a ten minute walk from Victoria and 15 minutes from Sloane Square, they snapped it up delighted with how much more they could get for their money.
As we move into mid autumn, it is clear that those buyers who took time out to enjoy the summer are back in force; new buyer registrations are up too. 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 not actually that many weeks to go and every year, as soon as December 1st arrives everyone (apart from us!) starts to wind down, including solicitors and the banks.
Despite huge demand, key to achieving the best possible price is sensible pricing. Serious buyers are generally in tune with the market, specifically with the values of properties in their areas of choice. Like 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 fine (constantly changing) line between enough and too much, making it imperative to market a property at the true market value, rather than a value designed to flatter the seller; if the latter approach is adopted, the best chance of achieving the best price is likely to fail.
Looking ahead, we expect the market to remain much the same over the coming months and in the run up to Christmas. Despite a healthy increase in new buyer registrations, we are also seeing an increase in valuations of stock and instructions, which is likely to keep the Pimlico & Westminster market in check, with marginal increases in prices as buyers compete to snap up their dream property before 2013.
Contact Pimlico & Westminster Sales Team on:
T 020 7828 8100
The Olympics have come and gone, but their effect on the rental property market continues into the autumn by Chris Coombes
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. However, demand for short-lets during this period was not as exciting as some had expected. So, as the Olympic-lets come 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 on to the market at this time of year.
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 Pimlico & Westminster office as well as the overspill of tenants from our Chelsea, Kensington and Notting Hill offices. Incidentally, 20% of the properties we let are to tenants, initially registered with our neighbouring offices, tempted by Pimlicos more attractive price tag.
Interestingly, and 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.
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 during the Olympic period. 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. Additionally, a number of international companies have recently moved to nearby Victoria and with the regeneration of Victoria Street, we have noticed increased demand from corporate tenants seeking one bedroom properties in the area.
Theres a great mixture of landlords in Pimlico & Westminster. Historically, the area hasnt attracted the same demand from investors compared to its more salubrious neighbours, but in recent years, and whilst weve been shouting from the rooftops WHY WOULDNT YOU INVEST IN PIMLICO, ITS A GREAT PLACE, things have certainly started to change. And now, even buyers investing from abroad recognise the value in owning a property in Pimlico. Tenant demand is, and always will be high, meaning investments will not only offer a healthy return, but also provide excellent capital appreciation. Even more recently, and in addition to the buy-to-letters, we have noticed an increase in the number of young professionals choosing to keep their first home as a rental investment and buying again, further out of the city.
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. Landlords can 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, it is still a great time to be a landlord.
Contact Pimlico & Westminster Lettings Team on:
T 020 7828 8100