The strong start suggests that 2013 could be a good year for the market, the delegates at Strutt & Parker's Rural Land Briefing in London heard.
According to James Mackenzie, head of Strutt & Parker's country house department stamp duty has affected the market but demand is up and supply is still very slow.
‘There are always going to be people who want to move to the country. Now, more than ever, you really can get an awful lot for your money in the country and it really does make a big difference. Perhaps we are about to see an upsurge in the age old tradition of moving to the country. I think 2013 might well prove to be as good a year as any,’ he told the conference.
However, some traditions are changing. He told the conference that maintenance and running costs are now far more important and the firm is now seeing far more sales of new builds which have lower costs.
Conference delegates also heard that the number of £5 million plus houses sold in prime central London went up 16% last year compared to 2011 and was up 30% on 2007, before the economic crisis hit.
London agent Lulu Egerton said 277 £5 million plus houses were sold in 2012, of which 76 were £10 million and above. This was up on the 233 sold in 2011, of which 58 were £10 million or over. Sales have shown a steady climb since 2008 when 113 units were sold at £5 million plus.
Egerton said the London market had seen an ‘astonishing turnaround’ in the last eight years and that 2012 was a phenomenal year despite the blip caused by the stamp duty increase for properties over £2 million and concerns over a new so called Mansion Tax being introduced.
‘The supply and demand squeeze puts extraordinary pressure on the London market,’ she said, adding that overseas buyers made up a large proportion of purchasers, with 8.9%, 8.7% and 6.6% coming from South America, Russia and Africa respectively, often trying to avoid turmoil in their own home countries.
‘The biggest change in the 28 years I have been selling property is the success of brand new developments in London. We are seeing very exciting projects which will regenerate areas of London which have until now been at the bottom of the class,’ she explained.
An example is De Vere Gardens which is to be launched by Strutt & Parker in July, was a case in point. ‘There are 97 apartments ranging from £3 million to £50 million. We could have sold them several times over already. This will be a very exciting development,’ said Egerton.
She added that Strutt & Parker has now been instructed to assist in the redevelopment of the former BBC centre at White City and will be selling 1,000 residential apartments there at roughly £1,000 per square foot.
‘In conclusion, the only blot on the horizon is a mansion tax which will affect home grown buyers rather than international buyers. As the supply and demand squeeze continues, we will continue to achieve good prices,’ she said.
