All eyes are on price growth of the prime central London since the shift in the dynamic that we saw in 2015. Prices in prime central London showed a monthly change of 2.1% in December 2015 according to the Land Registry. London is seeing a high level of activity and supply is now beginning to outpace demand with a 20 per cent increase in instructions registered compared to last year. Nick Jaffray was quoted in the International Business Times on the current market sentiment: “It is the variety of purchasers from all over the world and transparent government that we believe makes prime central London a stable market,” said Nick Jaffray, director of Jaffray Estates, a property buying agent in London, to IBTimes UK. He added that in the previous week, Jaffray Estates had taken on three new clients, two of which already owned prime property in central London. “At any given point there are concerns around the world, be it the Russian ruble, the stock market in China, or most recently the oil prices affecting Middle Eastern clients depending on their exposure. I remember three years ago I was buying flats for clients and 12 months later selling again after they had appreciated up to 25%. The market was concerning and actually no one wants to be invested in an unstable property market. There’s always going to be a small percentage of people who want something that’s a bit too good to be true, but the reality and the aim for the prime central London property market is maintaining stability and traction for the foreseeable future.” Jaffray said the Battersea developments, as a consequence, are not the ones he would show his clients. But this is just one project. When it comes to high-quality, prime London property, with all the bells and whistles, in the right locations, at the right price, there is still an undersupply, he said. The full article can be read here: International Business Times article.
ARE ON-LINE ESTATE AGENTS HERE TO STAY?
We are seeing a flurry of on-line estate agents in the market, and with Purple Bricks flotation onto the AIM market, the big question is are they here to stay? Notably, two substantial properties, in Kensington and Belgravia, have listed with on-line estate agents and will potentially save the vendors hundreds of thousands of pounds. But how can vendors save this money when they are not correctly informed of current market values and trends – much of this information is not readily accessible on-line and the information available tends to be partial and inaccurate. How can an on-line estate agent effectively sell a property over an expert local agent? An on-line estate agent lacks any personal service, which is highly valued at the higher end of the market. There is no skill in showing a property as well as pointing out unique features and selling points, not to mention the role of a buying agent that will discuss both the pros and cons of each property. Finding a suitable property is the first part, but we predict numerous issues to arise during the conveyancing process, where brokers are highly trained in pushing sales through, managing expectations for both vendor and buyer, not to mention their respective solicitors. We expect 2016 will make or break this industry, most likely having success in the outer London and UK market.
THE EFFECTS OF THE PROPOSED RISE IN STAMP DUTY
Since Osborne’s proposed 3% Stamp Duty increase on second homes, including buy-to-let, the market has seen a noticeable increase in activity, particularly at the lower end of the market between £1m and £2m. As investors rush to take advantage of lower rates set to change after March 31st we still await the specific details to be released set to steer the tone of this end of the market. Jaffray Estates have recently agreed a purchase for a client, who has multiple properties in prime central London, and we have agreed the purchase on the basis that the transaction completes by 31st March, ensuring our client doesn’t pay any extra Stamp Duty.