Increased demand for prime London property means competitive bidding and price rises. | 03 May 2022

Market comment from David Johnson, Managing Director, INHOUS

Introduction

Since the start of the year, London has very much been back in vogue with both buyers and there’s now an acute supply and demand imbalance. This has led to competitive bidding on properties and driven up pricing – asking prices have risen 13.8% in Kensington and Chelsea in the last year (April 2021 – April 2022).

This trend is set to continue if more supply doesn’t hit the market in the coming weeks and months. The supply shortage is deterring some would-be sellers from putting their house on the market, with little available and competition for their onward purchase.

We’re seeing strong activity from both the domestic market and overseas buyers now that travel restrictions have eased for many so now really is a good time to sell.

Domestic market

London living is certainly ‘back in fashion’ and we have heard of cases of buyer’s remorse among those who moved out of the city following lockdowns. We are no longer seeing the initial trend of people moving out of London for more space and countryside.

People are back in the office more than they thought they would be, and the conveniences that London provides – the nightlife, theatres and restaurants – are all significant pull factors.

We are working with a number of clients who are planning on upsizing within London as they see themselves living in the capital for many years to come. The pandemic really focused people’s minds on what they want from their space and where they want to live, resulting in higher demand for larger properties with more outside space.

As such, the family house market is where there is most demand and there’s a lot of pressure as you move up through the market – there is little availability and significant competition for houses above £4m. We are sourcing a lot of property off-market in order to meet this demand.

International market

As predicted and mentioned in our video, we are certainly seeing appetite from international buyers again, thanks to it now being easier to travel. We are particularly seeing interest from the Middle East and Asian buyers, although the latter tend to be purchasing “unseen” via video tours with buying agents as there are still travel restrictions throughout Asia.

Property – a worthy investment

We are seeing a strong appetite for people wanting to put their money into bricks and mortar, particularly with current volatility in the stock market. The clients we are acting for aren’t necessarily buy-to-let investors, but those either buying a flat for their children, or a pied-a-terre to use when in London, seeing London property as a safe long-term investment. These buyers are very specific about what they want – a well presented property in the best building, preferably on a private garden square.

The outlook

As the world continues to recover from huge impact of the pandemic, we expect the market to remain strong with good transaction levels, particularly for the house market. We anticipate a return to the more seasonal trends we’re historically used to in the property market, with a quieter July and August as people take full advantage of being able to travel again in the school holidays, and a busy Autumn market again from September.

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