The sales market has also proved very active so far this year, in contrast to a number of sceptics predicting that the surge in sales activity witnessed before Christmas would lead to a quiet first quarter.
In sharp contrast to this prediction, applicant levels have almost tripled since year end to the end of February, and this increase has also been mirrored in both viewing and offer and importantly agreed offer numbers.
‘As a result, a notable increase in the number of exchanged transactions is already evident across our five offices and is forecast to continue as we head towards Easter. Good quality, correctly priced stock continues to achieve premium prices and is generally selling in shorter than average time periods,’ said Catherine Penman, head of research at Carter Jonas.
‘The sales market up to £3 million has witnessed a notable increase in activity since the start of 2011 due to the ability for many active purchasers to fund purchases to this level in cash,’ she added.
But in contrast, the £3 million to £8 million market bracket has seen a reduction in activity, although this may well increase over the next quarter as a result of bonus payments from the banking and financial services sector.
‘Banking bonuses will provide a short term boost to the market ahead of the potentially dampening effect of April's 1% Stamp Duty increase taking properties over £1 million to 5%. The role of the overseas purchaser remains critical to the future success of the market, with European, Indian and Middle Eastern purchasers continuing to be particularly active across the market,’ Penman explained.
‘Currency fluctuations have provided excellent buying opportunities for non domestic purchasers, especially for those attracted by the apparent solidity of more tangible investments,’ she added.
She has noticed strengthening demand for good quality rental accommodation in light of the continuing global economic uncertainty. ‘Pricing is holding firm rather than increasing, although good prices are being achieved in prime locations. However, if an increase in stock levels continues over the forthcoming months, rental levels may well level off as the market becomes more competitive as a result of greater choice,’ she said.
A shortage of good quality stock in the Holland Park area have ensured that prices for both apartments and houses has remained strong, according to Gareth Jones, head of sales, Holland Park & Notting Hill.
A healthy influx of City bonus money in the traditionally sought after areas of Notting Hill and Kensington is expected to continue to buck the national trend during 2011 but the area’s lettings market is quiet compared to other parts of the city.
The sales market in Knightsbridge has witnessed improved activity levels during the course of February. However, the market remains sensitively balanced and the number of new applicants registering has been a little slower than anticipated, according to Ian Brownridge, head of sales, Knightsbridge & Chelsea.
‘Stock levels are at a reasonable level and the number of agreed offers increased by 20% over the month to the end of February and is anticipated to further improve over the forthcoming months,’ he added.
Rents have remained stable but are anticipated to rise slowly throughout the year, although not as sharply as witnessed in 2010. Rents are predicted to reach 2008 pre-crash levels during the course of the year, before reaching a plateau and holding during the winter months.
