Prime London Property
After a relatively quiet August, we have a chance to look back on the second quarter and reveal that Prime London property has remained moderately stable. Values across London’s prime housing market grew by an average of 1.6% in the three months to the end of June. Industry analysts put the relatively low-level increase down to increased stamp duty rates and unsold stock levels. They believe that these have restricted the usual bounce-back in values that we normally see after a general election.

Buyer caution is also a factor, and has perhaps been most noticeable at the upper end of the Prime market. Prices in the central London market have registered net growth over the quarter with a rise of 0.3%.


Good news for new investors
However, this soft market is actually the perfect news for new investors who want to increase their portfolio in the £2million+ market. Entry-level property around the million pound mark is relatively plentiful, but stock of properties with a higher price tag has (until recently) been restricted, both in the popular E14 and Canary Wharf area, as well as West London locations. Demand is already starting to push the values of £2million+ property upwards, with a quarterly increase of around 2.4% - a healthy and sustainable rise.

This also demonstrates that those who believe the market is going through a period of readjustment are perhaps a little off the mark in their assessment – the market seems to be holding a slow and steady upward trend. Investors coming into the Prime market at this point will almost certainly see a healthy return on their assets in the coming 12-18 months.


Entry-level Prime property looking strong
Those looking for £1million Prime property could also be in for a healthy return on their investments. This is the section of the market where buyers have benefited from the stamp duty reform. As a result recorded annual price growth has moved in the right direction, increasing by 2.4%. The continued mortgage market review may restrict the amount people can borrow, so those with capital to invest may find their negotiation position a little stronger as the number of investors in the market declines.


The summer is often the point where many short-term lets come up either for renewal or new properties become available, and while there may be plenty of vacancies, there are also plenty of tenants looking for the best deals and the best locations too. As the market moves into the traditionally busy autumn months of September and October, landlords can expect to see a flurry of activity and demand for prime lettings in areas such as Kensington, Mayfair and Marylebone as well as E14, Canary Wharf and the City. Keep an eye too on up and coming areas of west London and the southwest quarter.


A complete service for landlords
Prime gross yields for rentals remained at 2.96%, while the increase in availability of rental stock means that setting realistic rent levels is now much more important to entice tenants. Vanet have seen a rise in the number of landlords approaching them to provide fair and professional assessments, as well as manage property for them in their absence. “We’re seeing an increase in the number of overseas landlords who want a complete management service, rather than just a finder’s service from organisations such as ourselves,” comments Joel Brookes from Vanet.

“Management agencies are going to have to change their approach if they want to attract prime landlords with premium quality properties onto their books. A complete service, from rental assessment through to ongoing management is particularly important for landlords who have other commitments and cannot oversee every aspect of the process themselves. The market is changing, and we have to adapt to suit discerning clients, both tenants, those looking to buy prime property, and landlords,” he adds.


The right time to go to market?
So with a fairly stable prime market is now the right time to put your property or rental on the market? “Absolutely,” confirms Joel Brookes from Vanet. “We are expecting to see a rapid increase in the number of prime property developments in the next 12-18 months, so property owners should get into the market sooner rather than later to ensure maximum yield from their sale or rental. It’s going to be a very busy few months for sales and management agencies,” he concludes.

*All figures and quotes are accurate at the time of publishing  

Sales: Vanet Property Asset Management is a trading name of Countrywide Estate Agents,
Registered in England Number 00789476. Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP

Lettings: Vanet Property Asset Management is a trading name of Countrywide Residential Lettings Limited, Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP.
Registered in England Number 02995024 which is an agent and subsidiary of Countrywide Estate Agents, Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP.

Registered in England Number 00789476. Countrywide Residential Lettings Limited is a member of and covered by the ARLA PropertyMark Client Money Protection Scheme. Countrywide Estate Agents is an appointed representative of Countrywide Principal Services Limited which is authorised and regulated by the Financial Conduct Authority.