MARKET COMMENT JUNE
THE FLAT SEASON
A week or so back we had the Epsom Derby, generally seen as the pinnacle of the flat racing season. The week before we had Chelsea Flower Show. These come right in the middle of ‘the season’ which kicks off with the Cheltenham Festival (horse racing over jumps) in March and ends with the Goodwood revival in September (car racing in vintage clothes) with Henley, Ascot, Wimbledon, Lords etc in between.
The property market traditionally has its own season, the spring market. The 2023 spring market however feels very much like a ‘flat’ season with a different emphasis on the word flat. In fact, to continue the racing analogy, the property market came out of the starting stalls at the beginning of the year at a gallop, only to hit soft going by early April. Read more
- Agreed sales for the month of April were at a record low, excluding the lockdown-affected April 2020, and down almost 35% annually
- However, sales taken over the course of the year to date are only 1.4% below the pre-pandemic average between 2017 and 2019
- Across all prime London areas, the average discount to asking price rose to 9.1%, the highest in more than three and a half years.
- Additionally, the number of properties under offer, a lead indicator, was 11.7% lower than a year earlier, suggesting that activity is unlikely to increase significantly over the coming months
- In some positive data, new instructions in April were up by 8.8% on April last year, taking the year to date rise to 9.2%.
- Average values across prime London also showed a slight fall in April, with an annual decline of 0.9%.
- Prime inner London was the best performing area, recording annual growth for the first time in six months where it was up 3.5%.
- The market is looking better at the top-end though, with £5m+ sales volumes in April up 26.1% annually and 58.2% above the April pre-pandemic average.
- The number of properties going under offer in April also grew, 13.6% up on a year earlier.
We have alluded to the strength of the super-prime market in earlier bulletins, and this continues to perform as a ‘pull’ on the market. The contrast with the broader domestic market, where the ‘push’ factor is so critical, could not be more apparent. While both are sentiment influenced, the latter is nearly entirely dependent upon affordable and available mortgages, and the former more reactive to exchange rates and taxation.
An interesting article was published recently by one estate agent who, through a freedom of information request to Land Registry, established the following league table of current non UK owned residential property;
Politics continues to mess up our lives. We have the bizarre situation of a Conservative Government introducing the highest tax rates in 70 years. Meanwhile a Labour government in waiting is championing the middle class home owner with the slogan ‘builders not blockers’ as they stand fair square behind capitalist property developers (the stand out beneficiaries of QE and the largess of the Government’s Help-to-buy scheme) to address our ludicrous ‘nimby’ planning rules. Meanwhile this month the conservative party have a new bill before parliament which gives yet further rights to tenants, and makes it more difficult for landlords to take their properties back. Read more
We are still potentially 18 months away from the next general election. I used to think no leader should be in power more than 10 years (Thatcher went batty, Blair became a megalomaniac) but if ever there was evidence that a party should not be in power more than 10 years it is in front of us now. Mind you, although the UK had its flirtations with Corbyn and Farage I thank the Gods we are a long way off from having to have fascists and communists as part of our coalitions for government. Let alone a potential presidential run off with a Mélenchon/LePen type choice facing us as the streets burn, or Grandpa Gaga in the white house fighting off a rapist/Putinist waiting for a comeback. By contrast Starmer vs Sunak is a battle of the bland and I guess we should be thankful for that.
We keep very busy and are thankful that London continues to hold its place as The Global City.Our acquisitions side has been humming and, it has to be said, a welcome change to the past 2-3 years. The rental market remains on fire, and our challenge is to know how far we can push the rents to optimise our clients income. The Obespoke business goes from strength to strength and the following are two lovely projects to showcase;
6 bedroom duplex
4 bedroom townhouse
For more details about No. 1 St James’s Street and other projects, contact Hugh, Patti or Jonny on
+44 (0)20 7349 8920 or email email@example.com
|NOTE: The opinions expressed are solely those of the author and are not intended to offer any advice, formal or otherwise, on the nature of property investment. All the information is provided in good faith for general interest only. Recipients who have not formally appointed Obbard are advised to seek independent professional advice and to satisfy themselves on the state of the market, the opportunities and risks.|