by Angus Dixon
The summer months proved seasonal once again, with London families holidaying abroad and a slower pace descending over the market. September and October showed a good uptick in activity but there is most certainly still hesitancy out there from both buyers and sellers.
The third quarter of 2023 saw the market trends from the early part of the year continue. For the prime London sales market that meant weak demand feeding into falls in both values and transaction levels. Prime and Super Prime markets have remained resilient, with less reliance on finance from incoming purchasers. There is sensitivity around asking prices and vendors have become more realistic, without underselling and buyers coming in with heightened expectations on discounts may prove to bed is appointed. As Knight Frank states, the expected decline in the average price of a property in PCL this year is around 3% and in Outer prime, around 4%. Other mainstream markets will vary and will be higher.
It is sales activity that continues to be harder hit than values according to LonRes data. Transaction volumes have fallen significantly compared to the stronger sales market seen in2021 and 2022 but remain in line or even slightly ahead of where they were pre-pandemic. Despite ongoing economic uncertainty, further price falls are likely to be limited by the level of equity in the market and the low growth seen over the past decade. The market for homes at £5m and above has also seen falls in activity from recent highs.
It is interesting to note that current transaction levels are not that different to those seen pre-pandemic. In fact, they are 5.7% up on the 2017 to 2019 third quarter average on Lonres data. Therefore, the opinion of activity is likely to be concluded on which period you would consider to be ‘normal.’
The recent slowdown in sales does now appear to be impacting achieved prices. Values across prime London fell by 2.2% in Q3according to the LonRes Sales Index. It is likely that prices will continue to ebb and flow and transaction levels remaining low, until there is further certainty around the cost of financing remaining stable for an extended period, or potentially reducing.
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Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department.
The following payments may apply when entering an Assured Shorthold Tenancy:
| First month’s rent | In advance |
| Tenancy Deposit | 5 weeks, or 6 weeks if annual rent is over £50,000 |
| Holding Deposit | One week’s rent, put towards your first rent due |
| Early termination when requested by the tenant | A charge not exceeding the financial loss experienced by the landlord |
| Default charge for late payment of rent | A maximum of 3% above Bank of England base rate, charged when rent is more than 14 days late |
| Default charge for replacement of lost key or security device | Equivalent to cost incurred |
| Changing the tenancy documents after the commencement of the tenancy, including change of sharer | £50 incl. VAT |
The following payments may apply when entering a Non-Housing Act Tenancy:
A Non-Housing Act Tenancy is formed when the annual rent exceeds £100,000 or the property is occupied by a Company rather that an individual.
| Inclusive of VAT | |
| Tenancy Setup Fee drafting and execution of tenancy agreement if supplied by us, collecting and holding the Security Deposit as Stakeholder, issuing protection certificates, if applicable, Open Banking type referencing of tenant and initial Right to Rent Checks | £360 |
| Check-in Fee checking into the property and reviewing inventory | minimum of £130 |
| Tenancy Continuation negotiating and drafting an extension | £150 |
| Change of Sharer – Deed of Assignment | £120 |
| Early Termination – Deed of Surrender | £120 |
| Guarantor Referencing Fee (each): | £30 |
| Deed of Guarantee Fee: | £50 |
| Late payment of rent | 3% above the Bank of England base rate |
This guide is for tenants and landlords in the private rented sector to help them understand their rights and responsibilities. This guide includes a checklist and further detail on each stage of the rental process.
Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department for a full breakdown of costs. Here’s a list of what you can typically expect to pay:
| Lettings Service Only: | 10%+VAT (12% inc. VAT) – Including rent collection |
| Letting and Management Service: | 16%+VAT (19.2% inc. VAT) |
| Short Let (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
| Lettings Renewals Service: | 8%+VAT (9.6% inc. VAT) |
| Lettings and Management Renewal: | 14%+VAT (16.8% inc. VAT) |
| Short Let Renewal (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
Additional non-optional fees and charges
We will not be charging clients fees for referencing, tenancy agreements or deposit registration.
The costs of a clean, EPC, gas safety, EICR, PAT and inventory are set by third party suppliers and prices may vary. The below schedule is to give you an idea of what you would typically pay.
All fees stated are inclusive of VAT (calculated at 20%):
During the tenancy (if required
INHOUS is a member of and covered by the ARLA/Propertymark Client Money Protection (CMP) Scheme.
We are also a member of a redress scheme provided by The Property Ombudsman www.tpos.co.uk.