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Just two years ago we were all waking up to a new year, a reasonably untarnished new Prime Minister, and the realisation that Britain\u2019s painful divorce from Europe was finally at the decree absolute stage.<\/p>\n
Few of us had heard of Covid-19 and our vocabularies did not yet include phrases like social distancing, Zoom fatigue, WFH, or vaccine passports.<\/p>\n
Certainly older, and hopefully a little wiser, we enter 2022 with a sense of quiet confidence \u2013 in London\u2019s property market at least.<\/p>\n
\u201cOne of the things we have learned during 2020 and 2021 is how resilient the market is,\u201d said Caspar Harvard-Walls, a partner at Black Brick. \u201cAs we go into 2022 people must not be surprised if prices continue to rise. Houses have been outperforming flats during the pandemic, but clever people thinking of buying a flat should get moving early because there is a huge backlog of demand.\u201d<\/p>\n
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For Black Brick 2021 was a year when more and more people realised they needed some professional help to secure the house of their dreams.<\/p>\n
In the last 12 months our clients spent almost \u00a3100m on 25 properties, making an average saving of 3.6 per cent off the asking price.<\/p>\n
A third of them were British, the rest from the USA, Europe, and as far afield as Hong Kong, Nigeria, South Africa, and the Maldives.<\/p>\n
Prices ranged from \u00a3700,000 spent by a young musician on a home in Hackney, up to \u00a330m which has been offered for a full scale country estate.<\/p>\n
These figures far outdo 2020, when just under \u00a360m was spent on 13 deals, although in the early and uncertain days of the pandemic discounts were higher at an average 7.1 per cent.<\/p>\n
\u201cIn recent history it is certainly one of the best years we have ever had,\u201d said Harvard-Walls.<\/p>\n
Last year the overwhelming majority of clients were after a home to live in rather than an investment property. But Camilla Dell, managing partner of Black Brick, believes that imbalance is likely to shift this year.<\/p>\n
\u201cWe are just starting to see investment interest coming through, from people who think that the prices are right and interest rates are very low. I suspect that this time next year the split between owner occupiers and investors will look very different.\u201d<\/p>\n
On the subject of interest rates, the Bank of England will come under increasing pressure to raise rates again this year in order to curb rising inflation. In December the base rate was hiked by 0.25 per cent, the first rise in three years.<\/p>\n
But Harvard-Walls believes that while small incremental rises will inevitably make a small dent in buyer confidence (particularly at the lower end of the market), the bank\u2019s monetary policy committee \u2013 which meets again on February 3 \u2013 will hesitate to impose any hefty rises whilst the UK economy is still recovering from the pandemic.<\/p>\n
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One big change last year was a surge in the number of homes being sold \u201coff market\u201d, without ever finding their way into estate agents\u2019 windows or online portals.<\/p>\n
Last year just over four in ten of the deals brokered by Black Brick were done off market, compared to just under one in five during 2020.<\/p>\n
\u201cThe majority of people have been buying houses, and the availability \u2013 in areas like St John\u2019s Wood, Barnes, and Dulwich \u2013 has not been great,\u201d explained Dell.<\/p>\n
According to Propertymark, which represents UK estate agents, the average branch currently has just 21 homes for sale on its books \u2013 its lowest figure on record. Meanwhile London house price analysts LonRes reported that, in November, the number of listings was down a resounding 23 per cent on November 2020.<\/p>\n
This shortage has left many buyers floundering and means buying agents have had to get creative in order to find suitable homes for their clients, approaching owners of desirable properties not actually on the market to ask if they would entertain a \u201cone off\u201d viewing by an interested party. If a buyer has their heart set on a home in a particular street then writing to every owner to ask if any might be considering selling has also paid dividends.<\/p>\n
\u201cWe are making discreet approaches, because there is so little stock actually on sale,\u201d said Dell.<\/p>\n
She feels that the key reason for the lack of stock \u2013 particularly houses \u2013 coming onto the market is high buying costs. \u201cYou have got people in houses worth \u00a32m to \u00a35m who might like to move to somewhere bigger, but there is just no way they can afford it with Stamp Duty being what it is.\u201d<\/p>\n
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The latest UK house price index, published just before Christmas, found that house prices in London increased by an uninspiring 2.8 per cent last year \u2013 the lowest rate of growth of anywhere in England and Wales.<\/p>\n
But average price figures disguise a complicated truth. Research by LonRes, for example, found that the average price for houses in London increased by 9.6 per cent per sq ft last year, while the average price of flats declined by one per cent.<\/p>\n
Certain locations have also been having a real moment: Notably Notting Hill, with its great atmosphere and proximity to Hyde Park, and St John\u2019s Wood, one of the leafiest of north London\u2019s prime urban villages.<\/p>\n
Harvard-Walls said Notting Hill\u2019s market has been operating in a bubble of its own throughout the pandemic. \u201cWhat people are prepared to spend is completely extraordinary,\u201d he said. \u201cThey are spending \u00a34,000-plus per sq ft, and that is for a house on not a \u201cbest in class road\u201d or one which needs work.\u201d<\/p>\n
Dell has seen the same phenomenon at work in NW8 where St John\u2019s Wood\u2019s well equipped high street, proximity to Regent\u2019s Park and the West End, and good stock of detached houses, is pulling in new buyers. \u201cRecord prices are being paid,\u201d she said. \u201cOn Avenue Road and Acacia Road the \u00a33,000 per sq ft level has been breached. The market is on fire \u2013 for houses.\u201d<\/p>\n
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Late last year a slew of hugely optimistic property price forecasts were issued by some of our leading estate agents, universally predicting that 2022 will be the year that the Prime Central London bandwagon begins to roll once more after a subdued couple of years.<\/p>\n
Most recently, Winkworth cited a 44 per cent increase in the number of registrations and the long-awaited return of buyers from North America as reasons to be cheerful.<\/p>\n
Most of these reports were being drawn up before the Omicron variant had reared its head. But Camilla Dell, managing partner of Black Brick, believes that even this worrying evolution of the pandemic won\u2019t stop buyers looking for homes in the British capital particularly since, compared to prices back in 2014, there is good value for money to be found.<\/p>\n
\u201cWe might have a couple of slow months, but there is the booster roll out, and we now have all these vaccinations and medications to treat Covid-19,\u201d she said. \u201cWe are in a very different place than we were at the start of the pandemic.<\/p>\n
\u201cThe basis for a lot of these forecasts is that overseas buyers are returning, and the fact that the return to the \u201cred list\u201d has been scrapped is very encouraging.\u201d<\/p>\n
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Landlords were amongst the early victims of the pandemic. As Londoners fled the city centre in their droves a virtual fire sale ensued. Investors were forced to slash asking rents (by up to 20 per cent in some cases) in order to avoid leaving their properties standing empty.<\/p>\n
Today things are looking very different.<\/p>\n
According to estate agent Hamptons rents in inner London rose by 3.9 per cent in November, the first annual increase recorded since January 2020. Rents do still remain lower than they were at the start of the pandemic however, by an average of \u00a3305pcm. Meanwhile another London agent, Rokstone, reports that the number of rental deals struck in PCL was up 30 per cent in November, compared to the previous year, indicating that demand is back.<\/p>\n
\u201cRents are bouncing back after very significant reductions,\u201d said Dell. \u201cWhat that means is that they are looking like very good value, historically, and that is tempting people to come back to the city.\u201d<\/p>\n
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Asking price:<\/strong> \u00a31,925,000 Our clients were an American couple grounded thanks to the pandemic but keen to pick up a pied-a-terre near to either St James\u2019s or Green Park.<\/p>\n They were after a new build, with mod cons including a lift, porter, and air conditioning, and we were able to put in the leg work for them.<\/p>\n
\nSale price:<\/strong> \u00a31,825,000<\/p>\n
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