Article written and provided by James Moran, Head of London Sales at Middleton Advisers, for Beacon Gainer, professional services group and private wealth fintech advisory platform.

An overview of the prime London market as we enter the spring sales season.

“The start of autumn 2021 brought with it the expectation of a traditional, busy final quarter. For the first time in a couple of years, there were no obvious reasons for buyers to hold off. From a relatively slow start after the summer, the market quickly gathered pace and we finished 2021 with an encouraging flurry of buyer activity.

The central London housing market enjoyed a strong end to 2021. However, we do believe that the stamp duty holiday will have impacted achieved prices in both the first and second halves of the year, meaning changes in prices will be more pronounced than is normal.

Informed buyers can, of course, be laser-focused on specific targets and types of property. That ensured some impressive sales prices in certain categories of prime central London whose desirability increased over the time of the pandemic.

Houses versus flats have traditionally mirrored one another in terms of price growth, but the desirability of outdoor space – gardens, in particular, but also communal gardens – has become an increasingly significant factor.

Comparing prices achieved in the last three months of 2021 with the pre-pandemic period in early 2020 shows average prices for flats fell 1%, whereas houses are now achieving on average 9.6% more per square foot.

So we start 2022 on a positive footing with the UK’s transition from pandemic to endemic now seemingly underway. With minimal restrictions, we expect there to be a positive impact on the economy as well as a positive shift in general sentiment.

Stamp duty savings s a percentage of overall buying costs are highest in the sub £2 million bracket, and so, in the first half of 2021 many sales were pulled forward to meet June’s stamp duty holiday deadline.

Conversely, from July onwards sub £2 million sales tailed off a little, and we saw, instead, more expensive properties making up a higher proportion of transactions. This has resulted in the average value of transactions increasing significantly in the second half of the year compared with the first, while prices too, have edged upwards.

The £2 million-plus market continues to be busy with sales higher than the long-run 2015-2019 average every month since July 2020.

Prime fringe recorded a 4% annual increase in achieved prices in November, Prime London was up 2% and prime central London was up by 1.1%. Across the whole of London prime central catchment prices rose by 2.7%.

Having announced the launch of our London Sales division in the final quarter of 2021, we’re obviously pleased to see the market in such buoyant shape.

Whilst the temptation before Christmas could have been to place properties on the market immediately upon instruction, we felt that our clients would, ultimately, be more likely to achieve their objectives by holding fire a couple of months. Having read the market now, we feel that strategy has been fully vindicated and we are anticipating a busy spring.”

 

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Image was taken in Hyde Park, London, by photographer Gwen King on Unsplash