Brief Market Update - September 2021
The London Fightback…

Shadow skyline of building development

The London Residential property market has suffered in comparison with other parts of the country, but there are signs of a fightback!

Rental prices are starting to increase again as stock levels have fallen, and although larger properties with outside space have been popular throughout the pandemic, all properties now seem to be letting again. On the Capital side London has been underperforming but there are signs of “green shoots” in the Autumn market.

Eventually we believe the market will remember that London is one of the greenest capital cities in the world so the smaller properties with no outside space will become popular again. It may take a few more months or even a year or two but we believe it will happen and location should be the primary concern when purchasing a property.

Is there anyone who would object to being left a small piece of real estate in W1 or Belgravia ?! We don’t believe there are many people who would have a problem with this so perhaps COVID has created some real estate buying opportunities as smaller properties with no outside space have been left behind.

The chart below indicates how the prices have changed across London over the last 12 months with Barking and Dagenham the top performer at +5.7%, but Westminster also showing good performance at +4.1%. At the bottom of the league are Camden and Islington both showing negative performance at -5.2% and -5.7% respectively.

Borough Avg. price Sept 2021 Monthly change Annual change
Barking and Dagenham £346,594 0.4% 5.7%
Bromley £585,876 1.4% 4.8%
Westminster £1,366,817 -3.7% 4.1%
Bexley £450,376 -0.2% 4.1%
Sutton £511,207 0.7% 3.7%
Kingston upon Thames £642,350 -1.5% 3.7%
Enfield £485,861 -0.5% 3.7%
Croydon £466,314 0.0% 3.4%
Harrow £590,852 -0.6% 2.8%
Havering £438,046 1.2% 2.6%
Redbridge £484,948 0.4 % 2.5%
Hillingdon £519,235 1.7% 2.5%
Greenwich £475,926 0.7% 2.5%
Hounslow £562,975 -0.1% 2.1%
Barnet £667,941 -0.3% 2.1%
Brent £607,443 2.8% 1.7%
Wandsworth £817,422 1.4% 1.3%
Kensington and Chelsea £1,558,614 -6.8% 1.1%
Waltham Forest £519,641 -0.2% 0.9%
Tower Hamlets £574,372 1.9% 0.8%
Hackney £665,314 0.7% 0.3%
Merton £670,155 -2.3% 0.1%
Newham £431,946 -1.0% 0.0%
Hammersmith and Fulham £950,130 -0.4% -0.2%
Richmond upon Thames £886,052 -0.8% -0.7%
Lewisham £491,038 0.7% -1.4%
Ealing £568,739 -1.1% -2.0%
Lambeth £640,266 -2.3% -2.3%
Southwark £631,587 -1.1% -2.6%
Haringey £624,314 -0.8% -3.8%
Camden £959,827 -2.2% -5.2%
Islington £739,033 -0.9% -5.7%

Source Rightmove House Price Index 20.09.21

We suspect these numbers mask numerous factors to include leasehold flats with cladding issues, smaller properties with no outside space, and then some areas that may have larger houses with gardens. The outer suburbs have generally performed better as people have sought an improved quality of life whilst working from home.

The numbers also indicate there remains a lack of international buyers in central London with many agents confirming international buyer interest at a low level over the last 12 months, mainly due to not being able to visit London. However as international travel resumes, and we have just been told about the US allowing European double vaccinated travellers to be allowed from November, we would propose that there is a good opportunity now to get in to the London property market and to strike a good deal for those more unpopular properties from owners who may need to sell. This is unlikely to include houses with large gardens where there will be buyer competition, but there are some good apartments in good blocks without cladding issues where the location “screams buy me”!

On the rental side London has suffered from a massive oversupply created by the destruction of the short let market in March 2020. and then the loss of an estimated 700,000 foreign born residents (Source Economic Statistics Centre of Excellence) to create reduced demand and an oversupply of properties.

It is therefore no surprise that rents have fallen over the last 12 months but we are now seeing International Students returning and over bidding on properties to secure them for the new university term in October.

We are also seeing good demand from UK based residents who want to return to the “bright lights” for the theatres, bars and restaurants which are only offered in London.

As a result rents are already back to pre-pandemic levels and in some cases real rental growth is coming through. We expect this situation to continue to improve for landlords as supply continues to fall over the next 6 months.

Wherever you look in London it remains an expensive place to purchase property and there are now more factors than ever to consider as a buyer. We would therefore recommend to go as “prime” as you can afford and in the best street available, ideally for a property with the ability to “unlock” some added value. We can help source properties, “unlock value” with new floors in to airspace or just permitted development extensions. To take advantage of the new dawn in London where we can do all the work for you with our team, please contact either Ben or Dominic for a chat.

Ben Temple
Email: ben@templefieldproperty.com
Mobile: 00 44 7930 347573
 
Dominic Field
Email: dominic@templefieldproperty.com
Mobile: 00 44 7718 806366
 

Temple Field is a specialist London investment property search agency – we work with experienced investors and novice landlords to build buy-to-let portfolios of all sizes. 

Our client base is international, but all want to invest in London property for the same reasons: to provide security for their future; to help their children on to the property ladder; or simply to generate a source of regular income backed by solid capital appreciation.

Email us to find out more about Yield Plus ex-Local Authority investments

Our recently launched Yield Plus London Residential Property Opportunity is the result of our combined 30 years’ experience in the London property market. Yield Plus focuses on ex-Local Authority stock, and is unique in that it offers investors both capital growth plus monthly income in the London market. 

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