Second-home investors and people looking to buy homes for the purposes of letting them out to tenants are the main driver behind sales in the prime property market in London, it has been revealed, with more than half of purchased homes going to these two groups alone. According to a newly published London Property Monitor report from estate agent Marsh & Parsons, the first quarter of this year has seen these two groups account for as many as three in every five homes sold in the prime market. This has increased the number of cash sales taking place in the sector, dropping mortgage lending in the area.
Buy-to-let investors were the most prominent buyers during this three month period, the report has stated. Between January and March of this year, PRS buyers were responsible for the purchase of as many as 36 per cent of all prime London homes sold; a higher proportion than any other group.
This is the fastest quarter for rental investment in prime property in London since the end of 2014, when buyers looking to rent out their properties accounted for 37 per cent of sales in Q4 of that year. This three month period also helps to reverse a trend that had seen real falls taking place in prime property investment from landlords.In fact, between the last quarter of 2015 and the first quarter of this year, there has been a rise of some 26 per cent in the number of homes bought in this area by landlords. This is thought to have been down to a reaction from buyers who wanted to get in before the three per cent Stamp Duty levy, getting themselves more stock without accruing the higher price.”Investors will always be the stalwarts of the prime London property market as its the golden goose of capital returns. But second home owners were much more prominent in the market than we would typically expect,” said David Brown, chief executive officer of Marsh & Parsons.
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