The London property market gathered pace in the three months to September, according to residential property expert Chestertons, with the number of sales agreed by the firm over twice the volume compared to the previous three months and 37% higher than the same period in 2019.
Chestertons' 'Autumn 2020 London Residential Property Market Report' says that the increase is "even more impressive given that international buyers, who typically account for a significant proportion of buyers in central London, have been largely absent since April."
The reports says that between July and August, buyers became more active than they had been at any point since the first three months of 2016, with the firm recording more enquiries, viewings, offers and deals agreed. It suggests that there are a number of drivers behind this surge in activity:
- Lockdown experience caused more buyers to look for larger gardens or outside space
- With more people working from home, many required larger homes with space for a home office
- A desire to move before the stamp duty holiday ends next April
Despite the increase in activity, Chestertons says that the market has remained price sensitive.
According to Chestertonss, across Greater London as a whole, the Nationwide House Price Index reported that average house prices rose by 2.1% between July and September compared to the same period in 2019 (4.4% compared to Apr–Jun 2020), while Zoopla reported a 2.1% increase in asking prices in the year to September. However, Chestertons reports that, at the end of September, its own price index showed that average prices for properties in London’s higher value locations were 1.4% lower than at the end of June and were 0.7% lower than in September 2019. It also reports that prices in Central London fell by 1.7% over the three months to September and were down by 4.0% compared to September last year.
The report highlights that It is not yet clear what impact the ending of the Brexit transition period at the end of the year and the Government’s furlough scheme will have on the property market but unemployment will certainly rise which will have a knock-on effect. At the same time, the rush to beat the stamp duty holiday deadline will continue to motivate buyers and sellers to complete transactions by the end of March. Chestertons also suggest that non-resident buyers will be mindful of the introduction of the 2% stamp duty surcharge in April 2021.
Chestertons' market report also suggests that the difficult economic backcloth and the tighter mortgage lending criteria experienced in recent months is likely to curb the number of sales next year and predicts that that prices across the capital will fall by 2% due to the impact of higher unemployment and reduced consumer spending.