Latest London Property News: August 2021
Market Overview
We always expected a flurry of sales as we approached the 30th June stamp duty deadline and prime London buyers did not disappoint. Both June and second quarter transaction volumes exceeded levels seen at previous peaks in 2007 and 2014. Indeed, June 2021 was the busiest month on record for properties registered as sold on LonRes. The rise in activity is unlikely to be down to stamp duty incentives alone. The market below £1 million was the busiest, but there were 45% more sales of properties priced at £5 million or more. Given that the savings here are £15k, it is less likely to be the make-or-break deciding factor for a buyer facing a stamp duty bill of more than half a million pounds.
Record Low Interest Rates
As of August 5th, the Monetary Policy Committee have unanimously voted to keep UK interest rates at a record low. UK interest rates have been held at a record low of 0.1% amid speculation about the need to dampen rising prices. Rate-setters on the Bank of England's Monetary Policy Committee have diverged over whether rising inflation fuelled by the economic recovery is temporary. The MPC predicted on Thursday that inflation, now 2.5%, will hit 4% by the end of the year before falling back. The MPC, currently made up of eight members, not nine, voted unanimously in favour of holding rates.
The central bank will also keep up its £875bn quantitative easing programme following a seven to one vote in favour.
Inflation jumped to its highest for almost three years in June, at 2.5%, pushed up by the cost of energy and materials. Despite the forecast for inflation to rise further during the year, the MPC concluded that it would start to fall back to the target rate of 2%.
"The Committee's central expectation is that current elevated global and domestic cost pressures will prove transitory," the Bank said in a statement. But it added: "Nonetheless, the economy is projected to experience a more pronounced period of above-target inflation in the near term than expected in the May Report."
Separately, the Bank's latest economic growth outlook published on Thursday forecast a gross domestic product (GDP) rebound of 7.25% in 2021. Although this is unchanged from the previous estimate of 7.25% in May, it is still the fastest growth rate for 70 years. However, the Bank now expects the economy to then grow by 6% in 2022, compared with a previous 5.75% forecast.
Return of International Travel
The government announced the easing of many existing travel restrictions. From 8th August, India, Bahrain, Qatar and the UAE will be off the red list; Austria, Germany, Slovenia, Slovakia, Latvia, Romania and Norway will be added to the green list, and France will be moved to the amber list.
With Central London being so international, sellers can now expect to see a significant increase in activity. Buyers should expect to compete with multiple bidders on the few properties that are currently available for sale, so make sure your finance is organised, and our advice is to act decisively when finding your ideal property.
Jaffray Estates’ New Website
Jaffray Estates turns 5 years old this month. The company website was long overdue an overhaul and has been completely redone. Full details can be found on our key services primarily: residential sales and residential property acquisition in Central London. You can check out some recent client testimonials, have a browse our current properties for sale, and keep updated with regular London property newsletters. We hope you enjoy it!
Contact Us
For any residential property sales advice, please contact Nicholas Jaffray by telephoning: 020 3091 9311 or via email at: Nicholas@Jaffray-Estates.co.uk
We hope you and your families are keeping well during these challenging times, and that we will see you soon.