The prime London property market is at an interesting crossroads. International travel restrictions have just been eased, implying that foreign buyers of the London property market will certainly make their presence felt in a way they haven’t in the previous 18 months. With the school year in full swing, according to estate agents in Central London, October and November are not typically the busiest months of the year for international families looking to relocate. However, a number of targeted rich individuals are now coming to the UK, which is good news for Mayfair and Knightsbridge markets. In terms of international demand, we are thereby reverting to normalcy in tiny steps rather than one massive jump.
Race for space
Over the course of the epidemic, the prime London property market did not go into a deep freeze. The so-called ‘competition for space’ has played out in the capital in the same manner it has abroad, with residences in Kensington, Notting Hill, and Chelsea in particularly high demand and selling at record prices. With the reopening of workplaces, demand for pied-à-terres in London is increasing, particularly among those who have relocated outside the M25 and now face a journey that is slightly longer and more frequent than anticipated. Although the market has been strong, it has not seen the same level of frenzied activity as the country house market.
Prices in Central London
For the majority of this year, prices of properties for sale in Central London have been stuck in a holding pattern. While the rest of the country and the capital have seen great growth, this hasn’t been the case in zone 1 due to a lack of overseas purchasers.Meanwhile, due to the renewed need for greenery and space, there has been some noticeable expansion in locations such as Wandsworth, Richmond, and Dulwich. The most important thing to keep in mind is that the prime central London property market is overdue for a price increase. Due to a series of tax hikes and then political turbulence brought on by Brexit, conditions have been pretty calm for the past six years. We believe the market is at its breaking point and that growth will begin next year. After the general election in December 2019, we all thought the market will have an extraordinary year in the first two months of 2020. We won’t be able to start up exactly where we left off, but we expect 7% growth in 2022 and 25% growth in the five years leading up to 2025.
After the epidemic, the list of evergreen reasons that keep people coming to London from all over the world remains intact. Education, language, time zone, and the rule of law are all part of it. These are topics we discussed extensively before the epidemic, and I’m confident we’ll continue to discuss them long after it has gone from our collective memory.
Slowest housing price rise in London until 2024
House price growth in London is expected to lag behind the rest of the country until 2024, when it will pick up. According to the latest property market projection from estate firm Hamptons, prices in the city are expected to rise by 1.5 percent this year. After that, prices in London are expected to climb by 1% in 2022, 1.5 percent in 2023, and then three percent in 2024. After pent-up lockdown demand cools out, house price rise is likely to decline in the fall and winter, with the year ending at 4.5 percent across the UK.
However, a second wave of lockdown-induced demand will keep price growth positive in 2022, 2023, and 2024, at 3.5 percent, three percent, and 2.5 percent, respectively. According to experts the pandemic has hastened the narrowing of the housing price divide between London and the rest of the country. Even still, we expect London to lag the rest of the country until 2024, when the cycle is expected to come to an end.
Predictions for the future
While some levelling up will be seen over the next several years. The difference between housing prices in the capital and the rest of the country is likely to be bigger than it was at the conclusion of the previous cycle in 2007. And the pattern for future performance will be determined by this divergence. The North East is anticipated to see strong house price growth in the fourth quarter of 2024, with a jump of 21.5 percent expected, considerably ahead of the UK average of 13.5 percent.
According to the estate agency more properties will be sold in 2021 than in any year since 2007, with 1.4 million completions expected in the UK. Due to remote working or job changes, many people have taken the decision to relocate. People now place a higher value on their homes than ever before, having spent more time in them. Households have been encouraged to make larger migrations as a result of flexible and remote working, which is expected to continue.