The housing market has gone bonkers in London. Sealed bids, quick-fire sales and record prices are back.
After a prolonged period of Brexit stagnation and the shock of lockdown, the London housing scene, usually quiet in midsummer, is having an unexpected August bounceback beyond all expectations, with numbers of homes for sale up in nearly every borough.
Last month was up 44 per cent on the same time last year for Londoners buying a flat or a house, as pent-up demand, the stamp duty break and the staycation gave them the impetus and the time to search, according to a new Hamptons International study.
Typically, the long school summer break brings the quietest six weeks of the year for estate agents, as people jet off on holiday and sellers hold back for the autumn rush. But this year is different.
Covid-19 has shifted the seasonal pattern says David Fell, analyst at Hamptons and author of the report from which our statistics come.
“With fewer Londoners taking a summer holiday, the capital’s housing market had the busiest July in over a decade. Numbers [of people buying a home] were up in every single borough with all bar two recording double-digit increases on the same time last year,” says Fell.
Estate agents and sellers agree. “We launched a three-bedroom flat in a Victorian mansion block near the Oval in July. Just six days later it was under offer from first-time buyers, achieving a record price for the block,” says Tom Floyd of Winkworths.
Data from Rightmove shows high demand continuing into this month. Enquiries via the website rose 90 per cent in the first week of the month compared with the same week the previous year and sales agreed were up 55 per cent.
The news that the UK is in recession — the economy contracted by a record 20 per cent in April, May and June — may also spur vendors on to try to sell ahead of falling house prices, adding to this pressurised August market.
First-time buyers and families are keen to move on and out for affordability and space in outer London. The number of sales in Zone 6 jumped 51 per cent on last year, compared with just one per cent in Westminster.
Bexley had the biggest increase in deals done in any borough with an 88 per cent rise on July last year, followed by Wandsworth, Lewisham, Kingston upon Thames and Merton.
There are one-, two- and three-bedroom apartments available at Eastside Quarter in Bexleyheath. The development sits in landscaped gardens in the town centre and all the flats have balconies. Prices start from £276,995. Contact Bellway Homes on 020 8131 3525.
Flats are on sale in 14-storey Nine Riverside, the final phase of Riverside Quarter in Wandsworth. Each has a winter garden or balcony and residents have access to communal gardens. Prices start from £645,000 for a one-bedroom home (riversidequarter.com).
The borough with the smallest increase in home sales last month was Westminster. Making up the bottom five are Hammersmith & Fulham, Hackney, Kensington & Chelsea and Haringey.
Existing homeowners accounted for the biggest jump in sales, of 51 per cent, especially in the £800,000 to £900,000 price bracket.
For most families aiming to upsize, lockdown has been the driver, explains Hamptons’ David Fell.
Family-size apartments are on sale at Wakefield House in Kingston, part of the 300-home Royal Exchange development. The scheme will be set around a new public square with shops, restaurants, communal gardens, cycle spaces and a cinema.
Prices start from £490,000 for a one-bedroom flat up to £965,000 for a three-bedroom flat. Call Berkeley Homes on 020 3733 3920.
Large apartments are also for sale at Clapham Place, with balconies and a communal roof terrace, close to Clapham Common and Battersea Park.
One-, two- and three-bedroom flats and penthouses are available, with prices from £565,000. Visit regal-london.co.uk for details.
First-time buyers have been propping up the London propertymarket over the past five years, thanks to the Government’s shared equity Help to Buy scheme. This is set to continue with first-time buyer sales up 44 per cent in July, way ahead of investors at 26 per cent.
The stamp duty holiday below £500,000, as introduced by the Chancellor in his emergency July budget, makes a bigger difference to first-time buyers in London than their regional counterparts because of higher house prices.
There are seven apartments left in the Eagle Wharf Road scheme in Hoxton starting from £656,000 for a 646sq ft one-bedroom flat. It’s a 14-minute walk to Old Street station. Call Aitch Group on 020 8504 4500.
More expensive homes are for sale in One Crown Place in Shoreditch, walkable to the City. The building comprises 246 apartments, a hotel, offices and shops on the ground floor with a restored Georgian terrace. Prices start from £995,000 (020 7205 2697).
Developers are jumping on the early demand bandwagon and bringing forward their autumn new launches.
Notting Hill Genesis launched The Mare Building at Royal Albert Wharf, part of the £3.7billion regeneration of the Royal Docks, last weekend.
One- and two-bedroom shared-ownership flats start from £78,750 for 25 per cent of a £315,000 home. Call 020 3815 2222.
Legal & General has 78 shared-ownership homes at the South Quay Plaza near Canary Wharf. Flats are available from £108,750 for a 25 per cent share. To be eligible buyers must have a household income of less than £90,000. Visit www.landg.com/sqp.
This wave of activity is overwhelming lenders and throwing the mortgage market into chaos.
“The surge in demand eclipses anything we’ve seen in the past five years,” says Alex Ogario of Knight Frank Finance. “But there’s a flipside to this.”
With staff furloughed and international call centres under-resourced due to Covid, “lenders are creaking under the strain of all these mortgage applications.”
Banks offering the cheapest rates face a huge influx of applications. In a bid to maintain their service levels they are forced to raise their rates.
“This means you might see deals available at lunchtime vanish before the end of the day,” Ogario adds. Although rates have crept up since July, they remain very low.
For example, buyers can secure a two-year fixed rate of 1.14 per cent when borrowing a 75 per cent loan-to-value 25-year mortgage.
Five-year fixed rates are available at 1.58 per cent.
Although buyer demand is high and sales are up, the number of deals collapsing is also on the rise and could increase on the news that GDP dropped a record 20.4 per cent between April and June.
“Buyers are both discerning and nervous at the moment,” says Becky Fatemi of Rokstone Properties in central London. “We may find some now hold back expecting house prices to fall on news that the UK economy is in recession.”
Rightmove says more people are putting their homes on the market, making it tougher to sell.
“Vendors must get their paperwork in order early. Delays in this market can be the kiss of death for a sale,” says Fatemi.
Rokstone is selling a one-bedroom apartment in a mansion block in South Kensington on a garden square for £895,000. Call 020 7580 2030.
Spurred on by the stamp duty holiday and with a new baby boy, Charlotte Parkinson and her husband Chris, 30, have put their Chiswick home up for sale and want to buy in Brentford.
“We love our flat but after having a baby we want to be closer to my family,” says Charlotte, 31. “I am also starting a baking business called Charlotte’s Cake Company and want a bigger kitchen for all my equipment. The stamp duty changes have certainly made us keen to move sooner.”
The couple are selling their two-bedroom maisonette on the edge of Chiswick for £525,000 through Winkworth. Call 020 8896 0123.