UK and London residential market – the latest

Working through the second lockdown continues without new restrictions, and estate agents in England, including Chase Evans’ offices, are open for business as usual and are operating under the government’s guidance.

The UK housing market remains resilient and continues to perform well with steady buyer enquiries, new added listings, more realistic sales’ pricing, and, as recently published by Halifax, the annual house price growth standing at 7.5% at the end of October 2020.

Residential sales in London are currently driven by demand from domestic and international investors, second home buyers, home owners seeking to upsize, downsize, move to a new London district or even to a more rural area outside of the Capital.

Although the speed of matching sellers and buyers has improved (Rightmove’s House Price Index has found that national sales agreed were up 50% on October last year.), there is still a backlog or transactions waiting to complete before the end of March 2021, resulting in additional pressure on everyone involved in the process. Any delay in arranging mortgages, valuations and conveyancing could jeopardize an already agreed deal, so it is not surprising to hear many industry leaders calling for an extension to Stump Duty Holiday which, ‘coupled with continued cheap borrowing would significantly help propping up the market’.  At the same time, a more cautious approach has been highlighted recently urging buyers not to rush for the sake of tax break, as well as to look carefully at the rising costs of mortgage supporting products appearing on the market.

Meanwhile, looking at the UK rental market, last month saw rents rise for the first time nationally since March 2020. Still, the biggest fall by far was in Inner London area- 5.2% this year, according to Zoopla’s latest Rental Market Report.  The lockdown experience, working from home opportunities, search for more space and outdoor lifestyle options (Zoopla’s top searches for rental properties include the terms gardens, parking, garages, balconies and pets) have prompted many to move out of London to the suburban or rural areas, temporary or permanently. ‘The very heart of London has been hit the hardest with areas such as the City, Kensington and Chelsea loosing on rental demand from tourism and travel related industry. The current state has been described and the ‘two speed rental market across the UK’.  The research by property engine Home claims that ‘over the last year, rents have fallen in the City of London by 28.8 per cent, in Hammersmith and Fulham by 23.5 per cent, and in Kensington and Chelsea by 22.5 per cent.’  Meanwhile, in suburbs such as Bexley, Havering and Croydon, rents are rising.

How will the UK rental market progress, looking further into 2021?  Zoopla’s head of research Gráinne Gilmore predicts that: “For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth. We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents.” “At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.”

The latest scientific progress and breakthrough in the search for a vaccine against Covid-19 has given a much needed boost to the global economy and the overall optimism is tangible in England and London too. Once the life and employment return to London, our cities and the country, once the consumer confidence is restored, hopefully by spring 2021, the property market will be able to pick up the pace again. 

For the latest from Chase Evans’ selection of property available for sale for less than £500,000 check out our website HERE 

For more choice including new homes in Central and Greater London area, get in touch with one of Chase Evans Sales

Source:

LandlordToday

PropertyInvestorToday

HomesAndProperty