The Blog

September 2021

Introduction Since the re-opening of the housing market in mid-May last year, buyers have sought out properties with more space. This has been a market driven by domestic buyers. International purchasers – who traditionally account for a large proportion of prime London buyers – had limited access to the market and for the most part stayed away. Meanwhile those looking to remain in London were buying longer-term family homes and were prepared to pay a premium for the right property in the right location. This has benefitted markets such as Notting Hill, St John’s Wood and Hampstead as well as family-friendly South West London neighbourhoods. The opposite has been true for lettings where there has been a pickup in prime London tenants choosing location over property size. Over the summer months (July and August) we have seen a rise in the number of pied-à-terre lets in central locations, as workers head back to the office. The average size of properties sold in July and August this year was 20% higher than the 2016 to 2019 average. Sales market Across prime areas of London between June and August transaction volumes rose by 76.2% on the same period last year. But the rush to meet the end of the stamp duty holiday on 30 June resulted in a far busier June and a quieter July and August. The number of sales recorded in August was down 15.0% on the same month in 2020. New instructions appear to have settled too. Numbers of new listings are lower than they were a year ago, down 37% on a busy August 2020. But have returned to levels we would normally expect at this time of year. The number of homes listed in August was 11% higher than the 2015 to 2019 average. This follows a 6% rise in July. The end of the first phase of the stamp duty holiday would, many feared, lead to falls in prices as buyers looked to recoup some of their additional tax bills from vendors rather than dipping further into their own pockets. Across prime London the opposite has been true. With average prices achieved per square foot in August 10.1% higher than June and 3.2% up on August 2020. But that does not mean vendors selling last month could expect 10% more than those selling in June. Instead, we saw an increase in higher value sales post 30 June deadline, compared with a higher proportion of sales of smaller less expensive homes in the run up. Comparing prices paid in July and August this year with the same period last year shows buyers spent an average of £2.34 million, up £440,000 or 23% on the same two months last year. Analysis of sales volumes by price band supports this too. With sales at below £1 million in July and August down 53% on the same two months in 2019 compared with a 51% increase in sales at £5 million or more. Of course, higher values often equates to larger properties. Indeed in July and August more than half (54%) of homes sold had three or more bedrooms, up from 37% five years ago. This shift to larger homes has also impacted on the average size of properties sold. Between 2016 and 2019 the average size of a property sold in July and August changed little, averaging 1,254 square foot. Yet in 2021 prime London properties were 20% or 253 square foot larger than the 2016 to 2019 average at 1,507 square foot. While the winding down of the stamp duty holiday undoubtedly played a role in this rise, it is not the only reason. Domestic buyers on the hunt for space and in search of a longer-term home, have driven much of the prime London market, as international buyers stayed away. Yet as the market settles following a distorted few months for sales the outlook for prime London remains positive. Agents are reporting more overseas buyers registering as travel corridors open up and workers begin to return to their London office. The number of properties put under offer rose in August too, up 6% on 2019 levels and 12% higher than the long-run average between 2015 and 2019. Couple this with lower levels of new instructions and stock levels just 1% higher than they were a year ago means we could be preparing for a busy autumn. Lettings Market The prime lettings market this August is in a much better place than it was at the same point a year ago. Rising stock levels, which had caused significant rental falls last year, have receded and rents are rising consistently month-on-month. In August new instructions were down 30% on the same month in 2020 and 28% lower than the 2015 to 2019 average. This follows a similar trend to the one seen so far in 2021, with new instructions in the eight months to August down 26% on the long-run average. The lack of new instructions has been instrumental in reversing the level of excess stock on the market, with properties available to let in August down 57% on August last year. New lets between January and August this year are in line with the same period in 2019, up 0.3%. But August was quieter, with 22% fewer properties let in August this year compared with 2019 and 14% down on August 2020. Less stock on the market and increased competition amongst prospective tenants led to increases in achieved rents, up 2.8% on August 2020. Rents are now 6% lower than at the peak in early 2020, down from a low of -18% in February. Voids have also fallen, with homes now empty for an average of 66 days between tenants. This is down from a peak of 85 days in January. However properties are still sitting empty for two days more, on average, than August 2020 and 17 days more than August 2019. Average discounts dropped to 4.1% in August, down from 9.1% in August last year and more than 10% at the start of 2021. Fewer properties have needed a reduction in asking price to secure a tenant, with 29% of properties let in August this year having been reduced in price compared with more than half of properties in early 2021. Credit - LonRes

1 Bedroom Apartment overlooking the River Thames

Sales Asking Price £725,000 and please click the following link for property details: https://app.rexsoftware.com/public/ebrochure/?region=eu_uk_1&listing_id=109375&account_id=3384 Are you looking for that perfect London apartment for prime central London living or are you an investor looking for an apartment ready for an immediate rental return? This riverfront one bedroom property is located in the exclusive Foster and Partners designed Corniche building by Berkeley’s St. James, a purveyor of quality with a high reputation amongst buyers. The apartment is offered fully furnished and dressed for immediate rent (although can be offered without furnishings to an owner occupier) Luxury specification with Miele appliances, ambient lighting and good size storage and utility cupboard. The property is fantastically located for walks along the River Thames with Vauxhall underground Station (Victoria Line) 8 mins walk, and the Houses of Parliament and Big Ben a 15 minute walk.

2 Bedroom Kensington Luxury Apartment - Royal Warwick Square

Discover classical London living at Royal Warwick Square, with a prestigious collection of 1 & 2 bedroom apartments and penthouses in the Royal Borough of Kensington & Chelsea. Royal Warwick Square offers the classic London lifestyle; combining impeccable, professional service with beautiful, contemporary apartments set around a traditional garden square. It has an enviable location in the Royal Borough of Kensington & Chelsea, famous for its world famous cultural venues, idyllic parks, Michelin star restaurants and exclusive shopping.

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4 bedroom apartment with Hyde Park view to BUY for £4,000,000, London W2

An exceptional light-filled four bedroom lateral apartment in 3 Canalside Walk. An exceptional four bedroom apartment situated on the eleventh floor of 3 Canalside Walk, an outstanding new residential block which sits effortlessly alongside the Grand Union Canal. A sweeping reception room with floor to ceiling glass views across the canal and the City of London, features an integrated kitchen with Siemens appliances and discernible fittings. The Principal bedroom features bespoke walk-in wardrobes, en suite and its own south west facing private balcony. Bedrooms two and three feature walk-in wardrobes and en suites, bedroom four has a bespoke fitted wardrobe. The final touch that makes this south facing apartment stand out is the breath taking views which can be enjoyed from the 4 balconies. The property further benefits from underfloor heating throughout, CCTV, 2 extra large secure underground parking spaces and excellent transport links.

Introduction The market outside of London continues to dominate the headlines, with double-digit annual growth reported in many areas of the country. But, with modest price falls in prime areas of the Capital, it is easy to overlook the prime London market. A lack of overseas buyers able to access the market has continued to impact central London, yet strong domestic demand has meant activity so far this year has been brisk. But in most areas of prime London, we are not seeing demand outstrip supply. Estate agents’ windows have, for the most part, stayed well-stocked, meaning prices have not seen the rapid growth experienced elsewhere. Instead, overall prices remain 1.9% lower than the same period a year ago, although sought-after family houses are performing better. For lettings, the extension of current restrictions to late July could mean next month is quieter than some would have hoped. Yet stock levels are falling. New lets so far this year are up and rents appear to be recovering from their lows of early 2021. Sales market Comparing this year with last has been difficult for a couple of months now, with the housing market effectively closed from mid-March to late May last year due to the first national lockdown. This means fewer annual comparisons than usual as we look further back to assess how well the market is performing. With plenty of activity, both in prime areas of London and further afield, new instructions continue to rise. Comparing May 2021 with 2019 shows new instructions rose 33% and were up 8% on the five-year (2015-2019) May average. Indeed, the number of properties listed for sale has risen, compared with 2019 volumes, every month since June 2020. A steady stream of new instructions means prime London is not experiencing the stock shortages seen in some markets elsewhere in the country. This in turn has meant we have not seen the rapidly-increasing prices and competitive bidding reported in some hotspots where stock is scarce. Comparing the number of properties on the market at the end of May with the same month a year ago shows stock levels to be 36% higher. With the housing market only re-opening towards the end of May last year, sales activity this year needed to do little to match 2020 levels. Indeed, the number of sales recorded in May this year was 160% higher than 2020. Setting aside the annual comparison, the market remained busier than both 2019 and the long-run average, up 21% on 2019 and 20% higher than the May average between 2015 and 2019. Indeed, so far this year, the number of homes sold (January to May) is at the highest level since 2014. Yet despite there being only a small chance of completing before the new 30 June deadline (there is of course the additional tapering, but savings are a maximum of £2,500 rather than £15,000), we still saw more properties put under offer in May than both the 2019 and long-run average. The number of properties put under offer were up 22% on May 2019 and 10% higher than the 2015 to 2019 average. Lettings Market With an extension to restrictions now running until 19 July, the influx of workers back into central London looks to be delayed further too. This could mean a quieter early summer than some had hoped. Yet even with current restrictions in place, activity in the prime lettings market has increased, with rents looking to have bottomed out and even started to rise in some areas. Stock levels are now lower than they were at this point last year too, as fewer new instructions reach the market to let. The number of new listings in May is down 20% on 2020, 23% on 2019, and 31% on the 2015 to 2019 average. New lets fell marginally in May, down 2% on May 2019 levels, but so far this year activity has increased. The number of properties let in the three months to May are up 9% on 2019. Activity remains buoyant at the lower end of the market. In the three months to May the number of properties let at up to £500 per week rose 50% on 2019 levels, against falls in all other price brackets. Of course, lower average rents will have an impact here, as more properties now fall within the lower bracket. Yet an increase in demand for smaller homes will also be a contributing factor. So far this year the number of properties let with three or more bedrooms has fallen 7% on 2019 levels, compared with a 10% rise in lets of properties with fewer than three bedrooms. Despite fewer large properties let, agents are still reporting a lack of houses reaching the market. 70% of agents in our most recent LonRes Survey citing a scarcity of stock for houses. This compares with just 35% of agents reporting a lack studio and one-bed flats. A year ago rents had already fallen, down 13% on 2019 levels. But we have seen rents begin to first stabilise and then record modest increases in recent months. Source: LonRes

3 Merchant Square - Paddington Basin - London - 1 bedroom apartment for sale

Grange London is proud to present this beautifully presented one bedroom apartment situated on the sixth floor within a landmark and unique waterfront development 3 Merchant Square. This stunning apartment benefits from lift access to all floors and has floor to ceiling windows in both the open plan reception room and bedroom allowing maximum light to flood the apartment. Other features include a generous balcony which provides water views, dining area, engineered wood flooring, open plan fitted kitchen with reconstituted stone work tops and integrated Miele appliances. The dual aspect double bedroom has fitted wardrobes and stylish bathroom with concealed storage. The apartment has a comfort cooling system in the bedroom and open plan kitchen/ reception room The development benefits from 24 hour concierge, residents cinema, residents lounge, business centre, meeting room, treatment rooms and landscaped garden terrace. Notes from the architect: 3 Merchant Square is elegant and confident 21 storey canal-side residential building. The richly articulated façade combines impressive double height bays of stone with finely detailed layers of bronze cladding and glazing to provide visual interest. The interiors combine thoughtful design with immaculate detailing, clever storage solutions and flexible living spaces, allowing residents to stamp their own identity on the apartments. Transport: Located within close proximity of Hyde Park, nearby transport links include Edgware Road (Circle, District and Bakerloo lines), Lancaster Gate (Central line), Marble Arch (Central line) and Paddington Station. Asking Price £875,000