One-beds are pretty much driving the sales and lettings markets in Prime London at the moment, according to the latest stats from Marsh & Parsons.
Meanwhile, the agency recorded a 24% jump in the number of new applicants registering to buy during January, compared with the same month last year.
The supply of homes fell 12% year-on-year in Q4 2015, combining with this rising demand to create some intense competition. The agency says it had 13 buyers for every property in Prime London at the end of last year, with the demand centring on you guessed it one-bed homes.
Another interesting spot was the rise in the proportion of mortgage buyers in Prime London, which shot up from 49% to 66% between Q4 2014 and Q4 2015. Even in PCL, mortgage buyers were accounting for 44% of all purchases by Q4.
Peter Rollings, CEO of Marsh & Parsons: The London property market has begun 2016 with a spring in its step. The New Year always tends to bring a resurgence in purchase activity, as buyers shake off the last of the Christmas holiday haze and re-focus their attention on climbing up, or onto, the ladder. But the figures were currently seeing are strong even by those standards. Private buyers, landlords and other investors are rushing to secure their preferred property before the 1st April Stamp Duty hike.
The lettings market is all about the small stuff too by the sounds of it. M&P says the typical rental value of one-bed lets across Prime London rose by 6% over the course of 2015 from 392 to 415 per week compared to an average of 1.9% across all property types. In PCL, one-bed lets posted an even chunkier +7%.
Overall, January saw a burst of activity across the firms lettings departments, with the volume of agreed tenancies in Prime London up 44% on January 2015. Outer Prime London saw a 23% year-on-year increase.
PCLs rental market is expected to fare much better than last year, when a slowdown in corporate lettings hit annual rental growth, resulting in a rise of just 0.6%.
Rollings: Prime London lettings activity has seen strident start-of-year growth, especially in the Prime Central area. This can largely be accounted for by the sudden surge in corporate tenancies, after the sector experienced a somewhat flat 2015. Multinational organisations are currently engaged in a large-scale start-of-year talent hunt and so are snapping up the best places to house their brightest new recruits.
The rise in the value of one-bed lets and purchase properties indicates supply in the Prime London housing market remains an issue, as developers are still not being sufficiently incentivised to build the homes the capital requires. But with housing already a big issue in the nascent London mayoral election campaign, the Government might be spurred to act on the supply shortage as we head deeper into 2016.
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