It sounds like February was a pretty lively one in the PCL sales market; W.A.Ellis has helpfully flagged up last month’s whopping 49% year-on-year boost in transaction levels recorded on Lonres right across SW3, SW7, SW10 and W8.
The Knightsbridge-based team are never short of some interesting insight either, and there’s talk about lots of movement “behind the scenes”, along with increasing numbers of downsizers upping sticks in the £5-7m bracket.
The lettings market is still supply-heavy, but the firm reckons a wave of expats will redress the balance come the summer months.
Richard Barber, Partner: “We have received an impressive number of offers in recent weeks for both houses and flats, some of which we are openly marketing but there is movement ‘behind the scenes’ with a lot of off-market stock. We are increasingly seeing a number of people downsizing from properties in the £5m-£7m price range, and the market below £2m remains as strong as ever due to the stamp duty threshold and threat of a mansion tax. We were recently marketing a property priced just above £2m that received three bids all below the stamp duty threshold, reflecting buyers’ aversion to the cost of SDLT above £2m.
“According to Lonres data, overall transaction levels for SW3, SW7, SW10, and W8 are up by 49% from last year. There are, however, reservations surrounding the 2015 election, with many worried about a Labour or Labour/Liberal Democrat coalition government introducing a ‘mansion tax’ or similar wealth tax which could potentially affect the market. Bringing in measures to reduce the number of foreign buyers purchasing in London is hard to argue if you’re a domestic buyer attempting to climb the property ladder, however, the next elected government should not turn a ‘blind eye’ to the huge income that this foreign investment creates for the overall economy.”
Lucy Morton, Senior Partner and Head of Lettings: “So far this year, enquiry levels from prospective tenants are substantially higher than at the tail end of 2013. However, 6% more property has been launched onto the market than during the same time last year, exacerbating supply levels; supply is now outweighing demand in Prime Central London.
“That said, I believe that this imbalance will be rectified in the spring because the market has become so much more seasonal. With an improved economic outlook, expat tenants coming to work in the City are expected to form an increased proportion of demand during 2014. As such, we are anticipating that enquiry levels from April to October will continue to rise. Not only that, but the private rental sector continues to grow apace across London, and I believe this is partly due to first time buyers failing to raise the deposit to buy and get on to the property ladder.
“Presentation remains extremely important in order to achieve a successful let. A prime example is an unfurnished flat we put on the market at the end of 2013 which didn’t receive much interest. We advised the landlord from the outset to rent furniture and market the flat on a furnished or unfurnished basis. In the absence of a tenant, the flat was then furnished and dressed, and an asking price offer was agreed within one week (with two back-up offers), reinforcing the message that ‘presentation is key’.
“In the family house market, we are still experiencing a shortage of supply. However, with the lower number of transactions of family houses in the sales market, we could potentially see sellers becoming ‘reluctant landlords’ again and putting their houses on the lettings market.”waellis.com