December Market Update
What a year for the UK property market it’s been – starting with the longest lockdown period and a very damp outlook for the real estate market to one of the busiest years yet, with values increasing by 3% countrywide. Naturally, we are far from over with corona and the uncertainty that new variants bring, however if the last two years have taught us anything it’s that the UK real estate market is resilient.
Houses took centre stage this year with very strong demand from domestic buyers who wanted more space and larger gardens. Demand shifted from prime central London to the outer areas such as Chiswick, Hammersmith, Fulham, Richmond and St. John’s Wood. The demand for houses is still strong with prices reaching record levels in some postcodes. With the lack of foreign buyers coming to London (especially in the beginning of the year), apartments in prime central London were not in demand. Now that foreigners are starting to return, demand for well-located central London flats is starting to increase. Naturally, the new omicron variant might influence this in the near future.
December is always a slow time for the property market as people prepare for the festivities and leave London to visit family. According to the latest research from Rightmove, the number of days it takes from offer to completion has risen in London from 57 to 59 days. Although the market is quiet every year, the online search portals have their busiest day of the year in December. According to rightmove, “every year we see more and more people browsing properties on Rightmove during the post-Christmas Day festive period. In fact, last Boxing Day, visits were 54% higher than the previous year.”
Outlook for 2022
I’m advising clients that now is a great time to buy an apartment in prime central London. Values compared to 2014 are down 20% in some locations and there are predictions that prices will increase with the return of pent-up demand from foreign buyers next year. For example, Winkworth (a London estate agent), is predicting that Kensington and Chelsea will lead the UK property market in 2022. According to the agency the, “demand for prime central London properties was up 44% on pre-pandemic levels in the last quarter, compared to just 4% for suburban properties.”
The greatest challenge is the lack of stock – many apartment owners are holding off selling in the hopes that the market will be stronger soon. Working with a good buying agent is key in order to get access to the best quality homes – some which never come to the open market. Even with the homes that are on the open market, selecting the right home in the right location is key. Each borough has micro areas which consist of certain streets and buildings. Understanding where these micro areas are, and which are the best homes in these areas will help ensure that the client purchases a better home.
2022 could be the start of a growth period for years to come. While no one has the power of a crystal ball, two of London’s leading agencies are predicting very strong growth in the next 5 years. Savills believe that values will be up 21.5% and Knight Frank have predicted 25%. If you have been thinking about buying a property in London, this year could be a great opportunity to do so. To organise a non-committal consultation, please get in contact here.