Market Insights September 2022
It has been a month of unexpected events and we have outlined the property market outcomes we are seeing.
The team and I are available to advise on any property search, acquisition or property management requirements you might have.
Founder & Managing Director, Eccord
+44 (0) 20 7244 4482
Should we be holding off a purchase?
Since the mini budget, this has been a pertinent question from current clients and potential clients.
The honest answer is there is no ‘right answer’ and it is so individual circumstance specific.
Our needs based buyers are continuing with their purchase plans, fully aware of the landscape they are buying in. They are entering into a long term purchase and taking the view that the personal benefits outweigh the alternatives, such as paying high rents or living in a home which is too small or less conveniently located.
The demand for excellent houses remains. This month we fought off six other buyers to win sealed bids on a house in Highgate for a banker client of ours. Another client, who is upsizing and moving to Chelsea for an easier school run, has this week achieved a record breaking price per square foot on the house they’re selling in Holland Park.
The quest for long term family stability and proximity to the best schools continues to drive commitment from these buyers to secure a home. Fixing current mortgage rates before they climb even higher is also a driving factor.
For domestic, discretionary buyers already living in London, it is all about the right property coming up. For one client, who is already living in one of the best houses in their area, we have created a potential buying conversation for a specific house which they have always loved. For the right property, they will make the move in order to trade up to a genuine trophy home.
Our international clients are more divided. Some are seeing opportunity while others are putting plans on hold until there is more certainty.
With every client that we are representing, we are being relied upon to navigate them successfully within the market and enable them to make astute and informed buying decisions.
The strong rental market and its impact
High rental prices and a lack of supply are contributing to would-be-buyers’ decisions to continue with purchase plans.
Rental prices have increased on average 14% this year and, in some cases, we have achieved more than 25% increases for landlords whose properties we rent out and manage.
With regards to supply, record numbers of existing tenants are opting to stay and renew, which is reducing the natural turnover and supply of rental instructions we would otherwise see.
For those searching for a rental property, many are having to increase their budget, compromise on their requirements or widen their search areas.
The strong rental market is causing some discretionary sellers to hold firm on their asking prices for the time being, as they are confident they will be able to switch to the rental market and secure a tenant if they don’t achieve the sales price they want.
The drop in the pound against the dollar has had an impact but, in our opinion, not as much as recent reports would lead us to believe.
For those dollar buyers who are already actively searching, the exchange rate has made them more willing or able to secure properties more decisively. Many are taking the view that London property is now 30% cheaper for them and compelling value for money, with discounts covering their stamp duty and any refurbishment costs.
For those who have been sitting on the fence, we have seen many now ready to enter the market.
We believe it’s too soon to tell whether the exchange rate saving is enough to entice new dollar buyers. There are significant tax implications, personal and financial responsibilities and considerations that come with owning an overseas property, and ‘new dollar buyers’ will need to explore these before committing to take advantage of currency savings.
Over the next month or so, assuming sterling remains low, it will become apparent whether it is enough to entice completely new dollar buyers to buy.
We have been acting for clients for more than 16 years and acquired in excess of 400 properties. In this time, we have navigated many different market conditions and, whilst times of uncertainty can be daunting, in our experience they also bring opportunity.
London is a collection of micro markets made up of different property types and demographics, which react differently to market conditions. The key is identifying genuine opportunities and being sufficiently informed and positioned to take advantage of them.
If you are looking to buy or considering your options, please don’t hesitate to contact us.
For 16 years Eccord have been trusted by private clients, family offices and international companies to provide residential search, acquisition, relocation and property management services.
Our award-winning team since has successfully acquired over 400 properties and manages a portfolio of more than £1.5bn of rental properties and private homes.
T: +44 (0)20 7244 4485