Many sellers in London recognised the need to price realistically to get properties sold before Christmas and lowered their demands accordingly in a bid to lure in cautious buyers. Asking prices in the capital fell 1.7% in November, according to Rightmove, marking the largest drop since 2012, with London’s sluggish housing market continuing to see a sharper drop than any other UK region.
Property prices in inner London have seen the sharpest monthly decline, with values from October to November 2018 dropping 2.5% to an average £754,726. But activity has picked up, albeit marginally, thanks mainly to lower prices.
Miles Shipside, Rightmove director and housing market analyst, said: “Some buyers see this pre-Christmas price lull as a gift to their negotiations.”
Prime Central London’s (PCL) market has seen one of the most noticeable price drops over the past year, underlined by a slowdown in high-end residential areas such as Kensington and Chelsea.
According to LonRes data consultancy, which monitors transactions across PCL, prices are down 3% year-on-year, as asking price drops continue to accelerate.
But as central London flounders, activity is picking up across some prime regions outside PCL, creating an inner/outer divide in the capital fuelled by differing buyer motivations.While PCL is more investment focused, other areas, like Fulham, generally offers greater appeal for families, with purchasers typically occupying the properties themselves.
Fulham, of course, has not been immune to the slowdown that has affected the wider prime central London market following tax changes and higher transaction costs, reflected by the drop in local prices over the past couple of years – a rate of decline that is broadly in line with the average fall across prime southwest London.
But while high taxes and uncertainty remain a drag on progress, prices do appear to be bottoming out and this is enticing prospective buyers, as reflected by a surge in the number of applicants registering with Brik’s sales department.
With more properties in Fulham now on the market at asking prices that meet buyers’ expectations, appropriately-priced property is quickly attracting offers and that is why we expect trading volumes to increase as we head into 2019.
The market uplift in and around Fulham is in contrast to the performance of neighbouring Kensington and Chelsea, as needs-driven buyers move for schools or work and upsize to family homes in the local area.
There has been a spike in rental market activity in recent weeks, thanks in part to an increase in the number of properties available to let in the private rented sector.
According to the latest figures from the Agency Express Property Activity Index, the percentage of properties ‘to let’ in London increased by just over 15% in October, and that contributed towards a 30% rise in the number of properties ‘let’ last month - higher than any other region in the UK.
Stephen Watson, managing director of Agency Express, commented: “If we look back at historical data recorded by the Property Activity Index, we can see that a slowdown is usually anticipated in October. This month we have seen a spike in activity.”
Strong demand from renters has helped to drive up the cost of renting property in London, with tenants in the capital facing a 4% jump year-on-year, according to the latest data from referencing firm HomeLet, which is based on new lets agreed by landlords and letting agents.
“Average rents have increased above both inflation and average wage growth,” said Martin Totty, chief executive at HomeLet.
Over the past 12 months, rental values in London, much like house prices, have rebased and certain markets have responded more quickly than others, and Fulham is one of those.
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