Demand for houses and outdoor space requirements
As a result of the pandemic, many buyers have taken time to reconsider what they really want in a home. From larger properties to outdoor space, these lifestyle drivers have proven increasingly important for buyers, and they won’t be disappearing any time soon, despite a steady return to the office for many London residents.
According to Coutts, areas offering larger homes and green space were in high demand during Q1, reflected in increased sales across key areas such as Chelsea, Notting Hill and Holland Park.
Unsurprisingly, the demand for houses has outweighed the demand for flats and apartments, and there has been growing interest in freehold houses in prime central London during the past year, as opposed to leasehold spaces. With the UK still learning to adapt to the ‘new normal’, this increased demand is expected to continue for the foreseeable future.
During Q2, Savills reported that house prices in prime central London had only risen 0.2%. However, some postcodes have bucked the trend and there has been a clear surge in demand for large family homes in West and South West London, resulting in stronger price growth within these areas. According to Savills, the areas of highest demand have been Notting Hill, Bayswater and Holland Park, whilst Belgravia, Knightsbridge and Mayfair have seen less growth, likely due to the lack of international travel – we are already seeing signs that this will translate into a seller’s market in the coming months, making now a good time to buy in these areas, with less competition.
Stamp duty rush boosts sales
The stamp duty holiday has also incentivised buyers and positively influenced the market during the past year – particularly leading up to the holiday ending. By June 2021, Chestertons reported 70% more sales transactions than in any single month before, as buyers rushed to beat the taper deadline.
The stamp duty holiday coming to an end definitely resulted in a rush to complete purchases, as buyers were urged to act quickly. We recently had a client exchange and complete a stunning property in Notting Hill within 24 hours of the deadline.
Return of international travel
As we move into the second half of the year, activity in the market is maintaining pace and the future is looking promising.
With international travel set to return in the next few months, it’s highly likely that there could be a surge in overseas buyers, particularly in the areas of Knightsbridge and Mayfair.
At the moment, we're seeing a real mix of international buyers interested in prime central London property, including high net worth individuals from Singapore, India, UK and South Africa, and the changing lockdown measures will see a rise in foreign buyers re-entering the London market.
More buyers returning to the capital could have an unleashing effect on the prime central London housing market, meaning increased competition, which may result in bidding wars and sealed bid scenarios. As the world begins to reopen, activity will continue to pick up and London will remain one of the top global prime markets.
