The first half of 2010 has seen continual demand for prime property. This is across the board and very evident in central London and the South East. To secure the best houses and apartments in some cases premiums and competitive bidding have been necessary.
There is a shortage of prime property and this has certainly played a role in holding prices at current levels. The very low borrowing costs enabling owners of property to hold back from selling and wait for personal circumstances or market conditions to improve.
We are yet to see if VAT rising to 20%, CGT to 28% and aggressive redundancies due to government cut backs has a direct impact on property prices. Interest rates and inflation have significant roles to play and when rates begin to rise I am sure more property will be released for sale.
For overseas buyers the fall in value of sterling against the dollar and euro has made UK property a lot more affordable for non sterling purchasers. Over the last 12+ months a lot of prime property has sold to overseas clients. This trend will continue until sterling strengthens significantly.
We will read many predictions from different professionals giving opinions on the direction of property values over the next 6 months. Due to continual shortage of prime property, prices in key locations have risen and this has been the trend for the last 12-15 months. If confidence remains firm over the next 12 months I am sure property will continue to be a good investment. When interest rates begin to rise vendors will become more edgy, volumes will increase and we will enter a dominant buyers market (there is already evidence of volumes increasing). When this happens I do not see house prices falling, I see a static market with prices rising at a slower pace than in the last 15-20 years. Buyers will be less rushed when agreeing to buy and want to be sure the property is a good medium to long-term investment.
Whilst values have risen for prime property, in particular Knightsbridge, Belgravia, parts of Mayfair and Kensington, there has also been strong demand for country houses within 2 hours of London. Location remains the prime requirement, followed by style, size and condition. Unsightly views and noise have significant impact on value and these properties remain harder to sell but can sometimes offer a good purchase if a buyer is prepared to compromise, especially in a more cautious market. The most popular locations in central London have seen some fantastic sales. Many international buyers have been looking and buying large lateral apartments with skyline views and parking. Property with light, good ceiling heights, privacy and security are also winners. Tall thin houses over 5 floors are less desirable unless a lift can be added. Luxury, modern contemporary living is favoured with most international buyers. Finding this on one floor (lateral) is not easy and they need to be created.
The west side of London, M3, M4 and M40 corridor continues to be a favoured location. There are concerns regarding the location of the new high-speed rail link from London though Buckinghamshire, Northamptonshire and beyond leaving Oxfordshire, Berkshire, Hampshire and Surrey as key west of London locations. Gloucestershire, Wiltshire and the West Country are still much sought-after and preferred by those looking for weekend property or a change to rural life from the busy urban bustle of city living.
Generally, the prime property market is sound and still moving ahead. A buyer must be cautious, well advised and be prepared to walk away from a deal. Even though there is a shortage of prime property it is not a sellers market, vendors need to remember that. If you are a buyer and asked to pay a premium, is it the right thing to do? How many other buyers are ready to do the same and exchange in 5 days and have the funds in place? Asking the right questions and holding your nerve is the way to buy property on the best terms.
At Lowndes Partnership, an independent property adviser, we will negotiate on your behalf and make sure you buy the property on the most favourable terms and not the vendors preferred price, that’s our promise to you.
{ 0 comments }
