Local Sales Market Update
It’s no secret that the London property market experienced a somewhat colourful year in 2016. Property owners and investors were affected across the capital, and east London was no exception. In Q1 2016, buy-to-let investor demand peaked before second-home stamp duty surcharges kicked in – we held an average of 36 active buyers for every available property and experienced a record-breaking month of exchanges in March 2016. Following the EU referendum campaign announcement, we saw buyer confidence soften thereafter throughout the remainder of the year.
Demand growth
The sales market in Shoreditch has experienced a strong start to the year, and we anticipate it’s only set to continue as we enter the summer months. Demand from our buyers rose almost 70% in Q1 2017 vs Q4 2016 and, to match this demand, the number of properties coming on to the market has climbed steadily since (incidentally) article 50 was triggered on 29th March.
East London remains attractive for three prominent buyer types; young professional city-dwellers looking for their first homes and first-timers moving across from the local lettings market; local upgraders and growing families who have more substantial budgets; and a strong buy-to-let investor market coming from all parts of London and beyond.
Properties and prices
The most popular price bracket for properties sold in the 12 months to April 2017 fell between £300,000 and £600,000 making up some 60% of total transactions, followed by £600,000-£1 million with 30% of sales. Two-bedroom flats saw the highest turnover making up 47% of properties sold, followed by one-bedroom flats at 30%. Studio flats average £354,000 but can fetch anywhere from £235,000 to £700,000 [2]. An average one and two-bedroom flat achieves £466,000 and £646,000 respectively, commanding up to £800,000 and £1 million+ for high-specification properties located in sought-after buildings.
In terms of location, De Beauvoir and across towards Victoria Park and Bow offer charming converted apartments and terraced houses – always in high demand. These family homes start at just over £1 million, exceeding £2 million for larger properties. In diverse Stepney Green, the average one-bedroom flat commands £500,000, and up to £1.5 million for larger properties. There are also instances where several more opulent penthouses, particularly those located in serviced buildings throughout Whitechapel and Aldgate, have achieved up to £3 million.
Why is the area so strong?
With the imminent launch of Crossrail at Whitechapel, that will connect the heart of east London to Canary Wharf in three minutes (currently 13), and to Bond Street in 10 minutes (currently 23), it’s easy to see why properties near the station are expected to rise in value by 54 per cent from 2015 to 2020. [2]
Meanwhile, Amazon are about to occupy 15 floors of the new Principle Tower in Shoreditch as their new UK headquarters, and world-famous Nobu Hotel & Restaurant is soon to open on Great Eastern Street.
Further north, Old Street, Islington, Dalston and Haggerston form the alternate half of our coverage of east London. N1’s Wenlock Basin is well known for its high-end new homes as well as spectacular warehouse conversions. It’s also a short walk from Old Street and the famous Exmouth Market towards Angel and Islington, making it popular with ‘Silicon Roundabout’ tech professionals. The hotspot for nightlife is Haggerston, an up-and-coming area where warehouses and new-builds facing Regent’s Canal are also in high demand.
Opportunity
Times of uncertainty make the best climates for purchasing property and property prices in London simply don’t fall in the long run. In fact, over the last few years, the borough of Hackney has seen one of the highest levels of market growth in the capital. So, while mortgage rates are the lowest they’ve ever been and banks are readily willing to lend, many first time buyers are jumping at the opportunity. Between now and a likely rise in Bank of England interest rates by 2018, I predict the number of buyers will continue to spike.
[1] Rightmove data. Houses and flats sold 15 April 2016 – 16 April 2017.
[2] JLL data. Crossrail Identifying Opportunities 2015.
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