Outer Prime London areas are experiencing the highest New Year demand from interested buyers, with Barnes and Bishops Park seeing among the strongest rises in the number of buyers registering locally to buy property.
However, this sudden surge in demand for Prime London properties is contrasting with a continued shortage of housing stock in the capital. The supply of homes in Prime London fell 12% year-on-year in the last three months of 2015. This has led to intense competition to own a home in the capital, with 13 buyers for every property in Prime London at the end of last year.
Peter Rollings, CEO of Marsh & Parsons, commented: “The London property market has begun 2016 with a spring in its step. The New Year always tends to bring a resurgence in purchase activity, as buyers shake off the last of the Christmas holiday haze and re-focus their attention on climbing up, or onto, the ladder. But the figures we’re currently seeing are strong even by those standards. Private buyers, landlords and other investors are rushing to secure their preferred property before the 1st April Stamp Duty hike.”
The proportion of purchases in Prime London made by mortgage buyers rose from 49% to 66% between Q4 2014 and Q4 2015. As a result, the proportion of purchases completed by cash buyers fell from 51% to 34% over the same period. Even within Prime Central London – typically a hotspot for cash buyers – mortgage buyers accounted for 44% of all purchases by the final quarter of 2015. This comes as cheap mortgage finance continues to be available, while interest rates are held at historic lows.
Peter Rollings added: “It’s great to see mortgage buyers making such a solid comeback to the Prime London market. Until recently, a combination of the area’s high property prices and tough mortgage terms from lenders anxious about creating another housing bubble, has meant that Prime London – and Prime Central London in particular – has been heavily dominated by cash buyers, traditionally mostly wealthy private buyers and buy-to-let investors.
However, the effects of the Government schemes designed to increase liquidity in the property market – such as Help to Buy – have finally reached the higher end of the London property market. As a result, mortgages have become more accessible for those looking to buy in Outer Prime and Prime Central London, but who don’t have the capital to fund the whole purchase themselves, such as aspirational families and young professionals.”
