Buyers in central London property market undeterred, sellers cautious
Buyers in the central London property market appear to be undeterred by the current challenging times but sellers are more cautious and demand outstrips supply, says a new analysis.
Following a challenging end to 2018, this year started much the same for the central London property market, with lower levels of sales, prices still well off their 2014 peak and much uncertainty, according to the latest market update from agents Winkworth.
The first three months of the year has proven, however to be varied with different micro-markets experiencing some very different circumstances as some areas were much more active and some still proving more difficult.
Buyer demand remained strong and the start of the New Year brought a marked increase in registered applicants looking for property in central London through Winkworth offices. The report says that this became more apparent by the end of the quarter, when political decisions to push back Brexit softened some underlying uncertainty amongst movers.
There was a good mix of buyers registered and, although the majority of transactions in the quarter came from British and European Union buyers, who remain undeterred by Brexit proceedings, there are still plenty of international buyers looking for the right property.
But the analysis suggests that most of these buyers are ‘needs based’, purchasing for family, work and study in London and this translated, for the most part, into more lower priced transactions for one and two bedroom flats, as was the case for much of 2018.
The report also suggests that there are signs of some confidence starting to return to the market and a number of higher priced transactions started to push through. But prices did not record any positive growth in the first quarter and Winkworth expects this to be the case throughout 2019 as sellers become increasingly aware of the sensitivity of the market and how important realistic pricing has become.
Winkworth offices achieved an average of 92% of the asking price for its quarter one sales and there was a slight increase in sales. Overall, transactions still proved to be the biggest challenge for the whole sector but they are expected to pick up over the coming months, as confidence improves and those who have been holding off plans to sell can get back in the market.
Demand for property in central London is much higher than supply. With a 43% leap in applicants from the previous quarter, this is the second largest applicant increase between a fourth and first quarter in the past five years. With so many buyers searching for new homes, an increase in instructions would boost transaction numbers and get the market moving more.
‘Despite some more challenging times in the central London market recently, we have every confidence that this year will see a return to positivity and now that the market is bottoming out, we expect activity to increase as the year goes on,’ said Dominic Agace, chief executive officer of Winkworth.
‘Although we don’t expect any significant price increases this year, going into the second quarter, our offices have already experienced more optimism from buyers and sellers, particularly since the Brexit date was postponed and a no deal now less likely. However, with so few properties currently on the market, demand increasing and buyers becoming more determined, we’ve already seen some of our properties going for well above asking price and some with many offers,’ he explained.
‘People are more eager now to get moving, and those who had been adopting a wait and see approach are starting to move. It is now more crucial than ever for sellers to instruct a quality estate agent who can offer realistic advice based on years of experience,’ he added.