There is a general perception that London has been hard hit in recent years with prices rising too much for many buyers and foreign investors not interested because of Brexit but this is changing.
Well it cannot be argued that the market has not been dented, with the latest report from Cluttons showing that properties are selling for an average 11.5% discount on their asking price while sales are down 4.3% year on year, there is good news.
Indeed, Cluttons is predicting that while prices are set to keep falling this year, confidence will return after Brexit and the market in London is expected to outperform the rest of the UK during 2020 to 2022.
Cluttons also predicts that rental price growth will outperform sales across central London in each of the next four years with cumulative growth of 7.6% over that period.
You might wonder what is happening and it is clear from speaking to gents that activity has never gone away. The right homes are selling at the right price to the right buyer. But it is not all bright and breezy. Some commentators, for example, think that once Brexit is done then there could be a glut on the market with sellers who have been adopting a wait and see attitude set to put their properties up for sale and prices would fall even more as a result.
It is worth looking at what has been happening at the top end of the London market, a sector that has been less affected by Brexit. According to the latest analysis from Knight Frank the factors here are more complex.
Indeed, sales of super prime property have been on a broad upwards trajectory over the last nine months, according to the firm, and this has been helped by the weak Pound, so pent up demand is there, especially when buyers sense a bargain.
Knight Frank says there is a good balance of international and domestic demand, with many pricing in the political risk surrounding Brexit and taking a long term view while separate research from the firm has found that there has been a substantial increase in the number of buyers from the United States in London.
In 2019 so far American buyers have only been outnumbered by the Chinese. Overall there is also strong demand from Russian, German, Turkish and Saudi Arabian buyers. But it is not just to do with the weak Pound, the report suggests that it is also due to the strength of the London economy over the past two years.
I would like to add to this that the UK economy as a whole has been performing well despite Brexit and considered as stronger than the French economy and even the Germans. It might appear snide, but imagine where the economy would be if we had not embarked on the Brexit journey!
If you are not convinced that change is on the way, then at least be consoled by the fact that London has been named as the best city in the UK to rent a home if you have a pet.
Ray Clancy
Editor Property Wire
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