Market Insights September 2024

With the autumn market now underway, we have outlined the trends and behaviours we’re seeing in prime central London, with the upcoming Budget front of mind for many.

In addition, the government has recently announced its Renters' Rights Bill which landlords and tenants need to be aware of.

If you would like to understand the market in more detail, please don’t hesitate to contact me or the team and we would be delighted to discuss further or answer any questions you may have.

Best wishes

Jo Eccles

Founder and Managing Director, Eccord

+44 (0) 20 7244 4482

jo.eccles@eccord.com

Twitter | LinkedIn

Record levels of former rental homes for sale

In line with expectations, the supply of properties for sale has increased considerably in the first few weeks of autumn and we expect this to increase further, with selling agents reporting busy valuation levels.

As we shared last month, many of the properties newly launched this autumn are those which have been quietly tested off market at higher prices and are now coming onto the open market as sellers become more focused on securing a sale. As buying agents specialising on the buy side only, we gain access to all off market properties, so we will either have already acquired the best ones for clients, or we are strategically waiting for certain sellers’ expectations to become more realistic.

Another significant proportion of this new stock is comprised of former rental properties, as landlords attempt to sell up ahead of possible capital gains and inheritance tax changes in the autumn statement.

New data indicates almost a third of homes currently for sale in London were previously listed as rental properties – the highest on record. Many landlords are accidental and for our buying client searches, we always as standard, search across the rental market too. We  have successfully put together many purchase transactions with landlords whose preference is to sell instead, and the rental market therefore provides a valuable source of additional property choice.

We have been reporting for some time that landlords are testing the water in the sales market with a view to exiting buy-to-let if they can achieve the price they want, but many have so far been unsuccessful.

Whilst the possibility of an impending increase in capital gains tax is a factor in their decision making, many landlords in London who bought in the last decade have experienced minimal price growth during that period - or none at all. In our view, a potential increase in inheritance tax is therefore a far greater incentive for prime central London landlords – and pied a terre owners – to exit, many of whom have plans to pass investment property wealth on to children and are now eager to do so sooner rather than later.

Window of opportunity for buyers before Autumn Budget

For buyers who are decisive and can move quickly, there is a window of opportunity in the run up to the Budget, with very little competition in the market and large numbers of highly motivated sellers.

Significant asking price reductions are not visible, but opportunities do exist for buyers who can complete in the shrinking window before 30th October. If approached sensitively, there is scope for tactful negotiation.

Some of our clients are continuing their property search as normal; we are mid-negotiation on several transactions and embarking on newly appointed searches with no 30th October deadline.

For others however, their purchase plans are on hold until they have clarity on new tax regimes. And three entrepreneur clients who are in the process of selling their businesses were due to commence their property search in September, but have delayed while they devote all their attention to expediting their company sales ahead of the Budget.

UHNWIs retain London homes

Conversations continue among our high net worth clients about their future in the UK, but of the few who have already left or decided to leave, interestingly none are planning to sell their London homes.

Their futures may be uncertain, but most are not turning their backs on London or severing ties. The UK remains a location they enjoy and want exposure to, therefore they are making the decision to keep their homes as a London base or rent them out.

For those considering moving overseas, the security and maintenance of their home is a major consideration. This is one driver of growing demand for our Home Management service, which is now retained by 90% of our buying clients post-purchase, and more than half of our clients are now prime and super prime homeowners who have come to us independently or via recommendations from their private banks or other advisors.

We have recently been appointed by a Kuwaiti family to manage their newly refurbished Knightsbridge home; a financial services executive leaving his London home to start a new job in Dubai; and an international family moving to their new home in Notting Hill. In addition to liaising with the family’s interior designer, updating their security arrangements and managing housekeeping and gardening, we are ensuring the house is fully prepared for their arrival, making their transition to the UK as seamless and stress-free as possible.

Renters’ Rights Bill proposes substantial reforms

On 11th September, the Government published its Renters’ Rights Bill - essentially Labour’s version of the Conservative Rental (Reform) Bill which ran out of time to pass through Parliament before the General Election.

Here we outline some of the key changes and we will continue to update our landlords as the Bill progresses over the coming months, with Royal Assent anticipated by next summer when the reforms will come into force.

It is worth noting that the below changes only affect Housing Act tenancies – tenancies which rent for less than £100,000 p/year (£1,923 p/week) and are in personal tenant names, rather than companies.

Currently landlords can serve a Section 21 notice, enabling them to repossess their property from tenants without specifying a reason for possession. Under the new proposals, landlords will be able to regain possession after a minimum 12 month period, should they wish to sell or move back into the property, giving four months’ notice. Landlords will also be able to regain possession where there are serious rent arrears or anti-social behaviour.

Tenancies will be changed to a simpler structure known as Assured Tenancies, where they will run on a rolling basis until notice is served. Fixed term tenancies and renewals will be replaced by month-to-month leases. Landlords will be able to increase rents in line with the market price, on an annual basis by serving a Section 13 notice.

Renting bidding wars, or ‘best and final’ offers, will no longer be permitted. Landlords or letting agents must specify an asking price and will not be able to encourage or accept higher offers than the advertised price.

In these uncertain times, an increasing number of landlords are requesting a fully managed service to help guide them through the complexities of these changes and ensure they remain fully compliant with existing and new regulations. Please let us know if you would like to discuss this with our experienced rental team.

Eccord named one of the UK’s top buying agents

I am honoured to have been shortlisted for Buying Agent of the Year 2024. 

Spear's Magazine is one of the most recognised authorities on identifying the leading private client advisors and it’s an honour to be listed as one of the six very best residential buying agents in the UK. 

Our reputation as buying agents is based on years of expertise, network, connections, track record, client trust and discretion. The Eccord team and I have dedicated 18 years to achieving results for our client that they couldn’t accomplish themselves, whether that’s accessing a particular property, securing a more competitive price – or both. 

Thank you to all of our wonderful clients and professional partners that we work closely with, who have entrusted us to deliver exceptional results.