The South East London property market has been experiencing high demand from buyers over the past few years. The combination of recent transport link improvements coupled with a selection of affordable, good quality properties have made this area very appealing to a varied demographic.
With demand still outweighing stock levels and competition remaining fierce amongst buyers, many are paying above asking price to secure their property. However, South East London is still seeing a steady stream of buyers trying to get a foot on the London property ladder as other locations across the capital become increasingly unaffordable. Areas such as Forest Hill, Peckham and East Dulwich, have seen a noticeable rise in activity; with property prices in these areas in the region of 38% lower than those in Battersea and Clapham, buyers have been more inclined to look further afield. While the region is significantly cheaper than other parts of London, prices have risen by around 20% in the last year, encouraging many to invest here.
The low turnover of stock could also be a result of owners who have tracker rate mortgages, where they prefer not to change their mortgage conditions while interest rates remain low. Recent reports from the Governor of the Bank of England, Mark Carney, says that although the Government is in no rush to raise interest rates, there will however, be a gradual climb within the next three years where rates could reach 3% (6 times the current 0.5%).This may mean that owners will have to reconsider their options, which may lead to more properties coming onto the market. This will contribute to addressing the demand and supply imbalance and hopefully temper the rapid price growth witnessed here, generating more stability in the market.
The demographic is also starting to alter, there seem to be less investors and first time buyers purchasing in the region and more owner-occupiers choosing to buy and live in the area. Another pressure adding to the already high level of demand, are the new divorcees joining the market, newly encouraged by the better performing market, they often look to areas in South East London as they can often achieve more for their money. As a result there are more homes coming available, and a higher drive for smaller units. In turn, these new purchasers are now competing with the first time buyer market (who tend to buy properties ranging in price between £250,000 and £300,000), they also have the added advantage of being highly motivated and are usually credit worthy in comparison.
South East London’s rental market has also seen some pick up in average rents prices in the past year, although, tenants are still expecting to negotiate on price. Areas like Surrey Quays are very popular amongst City workers, while Streatham, London Bridge and Crystal Palace appeal to professionals, and Dulwich, Blackheath and Beckenham generate more of a demand from families. In addition, the regeneration of Elephant and Castle is leading to a rise in demand in this area.