London: the luxury that never goes out of fashion
Mon 17 May 2021
Paul Bennett, Director
Whether your idea of luxury property is a period dwelling, complete with ornate original features and a Grade II Iisting, or an ultra modern new build with a high-tech spec and views over the West End, London has never failed to disappoint.
The capital is home to dwellings that are so unique and rare that they can’t be found in any other cities, especially as many sit cheek-by-jowl with globally-significant cultural, business, travel and educational hubs.
While many will say the lure of central London is on its way back, running alongside the easing of lockdown, there are quarters in the prime property market that will tell you London never went out of fashion.
Coutts’ most recent Prime Property Index, which concentrates on high-end transactions mainly in London, shows activity in the prime markets maintained a degree of momentum as 2021 progressed. In fact, the pandemic did little to dent positivity among some, especially with the stamp duty holiday providing a boost in the form of a £15,000 purchasing discount.
The wealth manager and private bank also noted a rush of new instructions late in Q1, with 694 prime properties under offer across London at the end of March 2021 - the highest number recorded since the Coutts index began, and 3.1% above the previous record quarter in Q1 2020. Adding to the improving picture is its analysis that shows prime properties are selling 18 days quicker now that they were at this time last year.
In terms of long-term growth, the capital’s ‘safe haven’ status prevails, with international investment and purchasing activity continuing to underpin the city’s microclimate – especially as travel restrictions start to ease. Property value forecasts are therefore staying bullish, with prime central London prices predicted to grow between 5% and 35% over the next five years.
When it comes to London’s private rental market, there is a reshuffling of tenants and adjustment of stock levels. A ‘supply and demand’ situation is emerging in prime areas, with the number of properties to rent dwindling. This is set against the backdrop of increasing interest among tenants.
Adding authenticity to the developing climate are new statistics from Zoopla. The property portal reported a 7% increase in rental demand for central London since early April 2021, compared to the previous six weeks. It is thought a slight softening of rental values is tempting new tenants to try more upscale areas, while others relocate within central neighbourhoods.
The number of tenants looking for prime London properties to rent versus available lets may create the perfect storm for landlords. A rapid rent recovery is widely being touted, so now is a good time to start a buy-to-let journey - especially if you can exchange and complete before the stamp duty holiday disappears completely in September 2021.
If you are looking for real-time prime central London data, current property values and advice about purchasing a buy-to-let property, talk to the Behr & Butchoff team today.