The residential property market in London saw a buoyant start to the year and in some areas of London, premium properties have enjoyed price rises of up to 30% over the last nine months. Many factors contributed to this spike in activity brought about by high buyer levels chasing a much lower number of properties.
There have been a number of elements which have combined to contribute towards the frenzied London market, including increased overseas buyer numbers, which have soared in recent years. London is the first choice for many foreign investors, who regard the Capital as a safe haven. In addition the economic climate is improving and interest rates are at record low levels, while unemployment levels are also low and progressive consumer spending is generating more buyer confidence. There is also the Government’s Help-to-Buy scheme, which coupled with the lack of new homes built in the Capital, has added to the highs in the sales market.
It must be noted that in recent weeks, we’ve seen a stabilisation in the rising house prices as a result of lending criteria tightening further (the recent Mortgage Market Review). That said there is still exceptional demand for premium properties with the right characteristics in the right locations across London.
What determines the ‘premium’ one property might enjoy over an apparently similar one?:
1. The location of a property still remains the number one consideration when looking at the premium one home can enjoy over another. Buyers tend to consider everything from school catchment areas to proximity to transport links, postcode snobbery and even conservation areas when choosing the right location. According to a recent article by The Telegraph “Buying in a conservation area is an almost cast-iron guarantee that the value isn’t going to drop.” (Source: The Telegraph: 23/06/2014
2. Outside space, such as a roof terrace and a courtyard are important considerations when determining premiums for London property. Londoners are desperate to own even a small piece of outside space for themselves and in the current sales market, Londoners are prepared to pay up to 20% more just to have a slice of greenery.
3. The ‘selling rooms’ a common term used to describe the living rooms, master bedrooms and kitchens, typically draw in the premiums. Buyers often purchase properties based on emotion and more often than not, an ultra-modern kitchen or bathroom, is a key decision making factor. If either have new appliances, modern technology, new tiles or surfaces and well-made stone work tops already installed, it often makes all the difference.
4. The emotional connection of a buyer to a clean, clear and comfortable future home is imperative in gaining a premium. People don’t want to see your personal belongings cluttering what could be their new study or bedroom, they want to be able to picture their things there. We often advise our vendors to employ a cleaning service to carry out a full clean prior to viewings, with special attention paid to the kitchen work surfaces, living rooms and bedrooms.
5. Properties with short leases can often have their leases extended, ensuring a higher premium. These homes can often be purchased at a considerably reduced price, allowing for substantial gains once the property has a longer lease.