Last month we looked at the potential for smart buyers to capture a bargain on the prime London property market. This month has presented further evidence of this potential…
There’s no denying that there has been a slow-down in interest in Prime London properties recently, due in part to the recent increases in stamp duty. But now may in fact be the perfect time for smart buyers and investors to secure a choice piece of property in the heart of the capital.
According to the International Business Times, a third of properties for sale in Kensington and Chelsea have seen their asking prices cut by an average of 8%. Desirable prime London property in other locations has also seen cuts in asking prices, including in Kingston-upon-Thames, Hammersmith & Fulham and Wandsworth, which all saw 29-30% of properties listed for sale reduce their asking prices.
“If you’re in the market for prime London property, now and the coming months may be a prime time to get your foot in the door,” commented Vanet’s director, Joel Brookes. “As demand slows, sellers keen to make a sale may lower their asking prices to tempt buyers, this may well be a time for rich pickings across areas like Kensington and Chelsea and Westminster.”
Planning restrictions on ‘home merging’ in prime London
As reported in the Financial Times, the borough authorities have rejected approximately half of all applications to knock through joining walls in order to merge separate houses or flats into single larger properties in 2015 and 2016. Prior to that, most such applications had been successful, but in the past five years applications have almost quadrupled.
It appears that the reason for this increase in rejections is due to the additional challenges it poses to the local authority in meeting their targets for home provision.
A spokesman for the Royal Borough of Kensington & Chelsea told the publication that, “we have a housing target of 733 [new] units per annum set in the London plan and the loss of any units will have to be added to this figure... We estimate we were losing around 100 a year through amalgamation and therefore the impact is significant.”
Vanet’s Director, Joel Brookes, commented that, “people are seeking to combine prime properties in the heart of the city for a number of reasons. For some it’s about creating a larger space for their families, for others it’s about increasing the capacity for luxurious living and alterations, while for others it’s about increasing the resale value of the property.”
London to build extensive numbers of new luxury homes
According to a new report, there are currently approximately 35,000 prime London residential properties due to be constructed over the next ten years. This represents a considerable enlargement of the total value of the prime market in the city – an estimated additional £77bn – and is itself a 40% increase on the numbers estimated just two years ago.
So where are these new luxury properties being built? The report found that a considerable proportion – almost 11,000, worth £20bn - will be built in Chelsea and Fulham, while almost 9,000 will be built across the river in Southbank, and just under 6,000 in the City and City Fringe areas. Considerable numbers will also be built in Victoria, Pimlico, Docklands, Kensington, Bayswater and Mayfair.
Of course many of these new properties will not be on the market for years yet, and existing luxury homes are going to be highly sought after. If you’d like to find out how much yours is worth, get in touch with Vanet for a free valuation.