Property Market Update - January 2020

We are barely a month in, and already 2020 is looking fruitful for the property market. There has been a sharp increase in positive reporting around a post-election property boost. There are still plenty of quantifiable measures to consider when purchasing a property, therefore first rate, specialist advice is always going to be key when keeping ahead of the market.

Boost in sales for Prime Central London’s most expensive homes

For years, the market for London's most expensive homes has been falling. Prices sank and transactions slowed. But now, the falls appear to have bottomed out. From October to December last year, sales of prime central London (PCL) homes were up by 34 per cent on the same period in 2018, according to new data from LonRes. Sales of homes worth more than £5 million increased by 78 per cent. Crucially, during this period prices rose by 2.4 per cent. This was the first annual rise since mid-2018, and follows five consecutive quarters of falls.

Source: London's frail top-end property market bounces back after Tory election win

Explosive rise in prospective buyers

A number of London estate agents reported a surge in prospective new buyers registering their interest in the first few weeks of the year. Knight Frank’s London office reported its highest weekly total in over 15 years, with the number of viewings rising to its third highest on Saturday 11th January.

Christopher Burton, head of Knight Frank’s Dulwich office said, “We have had our busiest ever Saturday for viewings this week. The second half of last year was active as buyers ventured back into the market, but interest has exploded at the start of this year.”

Rise in exchanges on pre-existing homes

Knight Frank has also revealed that, excluding the month before a pre-announced Stamp Duty increase in April 2016, the number of exchanges for existing homes in prime central London in December was the highest monthly total for almost six years – since April 2014.

The overall monthly figure was boosted by the post-election period. In the ten working days following December 12, Knight Frank transacted more exchanges in prime central London than in any equivalent period since December 2016.

Overall, the number of exchanges in prime London markets was 14% higher last year than in 2018 and the highest annual total since 2014.

Source: https://propertyindustryeye.com/just-capital-buyer-applicants-at-highest-level-in-london-for-over-15-years/

Rise in house prices and boost in the North

The Independent reported that the average asking price for a house will increase by 2 per cent over the course of 2020. Rightmove also predicts northern regions will perform better than those further south where, “buyer affordability remains most stretched”. In the south a rise of 1% is predicted.

Rightmove director Mark Shipside reported “the largest increases will be in the more northerly regions, repeating the pattern of 2019 with increases in the range of 2 per cent to 4 per cent.”

Reporting on the Rightmove Data, the Guardian stated, “the average price of properties coming on to the market jumped by 2.3%, the biggest rise for the period since the property website started its house price index in 2002. Nearly 65,000 UK properties were marketed over the month, with an average asking price of £306,810.”

Conservative majority reduces Brexit concerns

Many sources have cited the Conservative majority in the general election could be responsible for a more confident outlook for the housing market.

In the immediate aftermath of the election, between 13 December and 15 January, the number of sales agreed increased by 7.5% compared with the same period a year earlier. The property industry has also predicted a further increase in activity this coming spring.

Miles Shipside agreed that the election result had provided a “window of stability” for movers after a period of instability since the Brexit vote, which had put off potential buyers. He said, “the housing market dislikes uncertainty, and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate. There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market. While there may well be more twists and turns to come in the Brexit saga, there is now an opportunity for sellers to get their property on the market for a spring move unaffected by Brexit deadlines.”

Boost in sales for Prime Central London’s most expensive homes

For years, the market for London's most expensive homes has been falling. Prices sank and transactions slowed. But now, the falls appear to have bottomed out. From October to December last year, sales of prime central London (PCL) homes were up by 34 per cent on the same period in 2018, according to new data from LonRes. Sales of homes worth more than £5 million increased by 78 per cent. Crucially, during this period prices rose by 2.4 per cent. This was the first annual rise since mid-2018, and follows five consecutive quarters of falls.

Source: London's frail top-end property market bounces back after Tory election win

Laurus Advice

We are dedicated to giving our clients pragmatic advice and the personal touch. As the housing market becomes increasingly competitive it is more important than ever that agents and lawyers work closely together to ensure their clients have a successful and timely transaction.

What this means for sellers

At Laurus we act for clients from valuation onwards to ensure their paperwork is in place and their property is Sale Ready ahead of a buyer being found. This enables us to have a draft contract and supporting documents ready to supply to the other side's solicitors and to anticipate enquiries and prepare answers in advance. We have seen this approach dramatically reduce the time taken between offer acceptance and exchange.

What this means for buyers

Competing with other buyers for property can be stressful and requires the right professional around you to avoid disappointment and wasted costs.

Effective sales progression from both lawyer and agent is key. There is an overlap in the responsibilities of the lawyer, surveyor, mortgage broker, and estate agent. A successful team will see the agent and lawyer acting as project managers and working together to ensure a timely and successful sale.

At Laurus we take a proactive and collaborative approach, working closely together with all parties to ensure that key stages are completed early and that the lines of communication are kept open at all times.

We we will ask pertinent questions as we take instructions:

• Has the buyer applied for a mortgage and a mortgage valuation been booked?
• Has the buyer booked a survey?
• Are deposit monies in place?
• Have anti-money laundering checks been completed?

More specifically on the legal side, have searches been applied for quickly and when are the results anticipated? Have enquiries been sent to the other side? Staying ahead of these steps will aid a speedy transaction.

Working together is the foundation of the Laurus ethos

Swift and efficient communication is key. The days of lawyers not accepting calls or responding to emails from estate agents belong in the past. If we are to help our clients complete their transaction successfully it is a team effort and all parties need to know exactly where we are along the process.

If you are passionate about helping your clients achieve a timely and successful transaction, and to take advantage of the renewed optimism in the market, please get in touch.