London 2012 Overall 2012 was a stimulating year for the London market, London fast became the most talked about city of the year - hosting The Olympics and celebrating the Jubilee (not to mention the masses of celebratory street parties)! London maintained its cosmopolitan image and retained the position of property capital of the world in spite of the tax uncertainties that got in the way.
The budget 2012The Chancellor whacked up tax rates on primeproperties in May 2012.We are now eleven months into the new period of7% stamp duty for transactions over £2 million and15% if buying the property using a “non-naturalentity” such as an offshore or onshore company. The mansion tax uncertainties ensured that the top end of the market slowed down, whereas properties below the £2 million threshold were being snapped up with a record amount of applicants per instruction.
The budget 2012 Research shows that transactions on £2 million + properties had fallen by over 40 % from April to September 2012 compared to 2011
The budget 2012 We have seen a surge of interest for properties over £2m since the 7% stamp duty has settled and the talk of mansion tax is unlikely to happen.
Funding for LendingschemeLending has remained the most noteworthyconstriction on the housing market activity in2012 – governments new Funding for Lendingscheme is unlikely to make much difference tomortgage availability.
Fulham buyers We have found that the Fulham market hasn’t really been affected by lending restrictions because most of our buyers are... The remaining We have seen that 50% are mortgage our average 50% cash deposit size is over buyers buyers 50%
Generation rentGeneration Rent is a hangover fromthe credit crunch, now borrowersneed to have considerably biggerdeposits to get a mortgage. That’sforcing many more to rent, andthat increased demand has, in turn,pushed rental prices up to record “Rent rises trap a generation wholevels. will never afford their own home. Stagnant wages, increasing rents and rising house prices mean would-be homeowners unable to save deposit for first property.” The Guardian
Generation rent The average rent in the capital has risen by 6% in the past year and by a staggering 32% since 2009 by 16% in the past two years and by a staggering 32% since 2009
Generation rentPeople with the money to invest in a second propertyfor a buy-to-let investment are tapping in to thegeneration rent market…including parents looking toget their children on the property ladder.
Generation rent We have seen a massive increase in the amount of parents buying 2 bedroom flats for their children as an investment/to get them on the property market
Buy-to-let The buy-to-let market rocketed its way through 2012, with lending up to 11.5% of the total gross mortgage lending at £16.4bn (for a total of 136,900 buy- to-let loans). That’s 19% higher than it was in 2011, and its highest level for four years Figures from the Council of Mortgage Lenders (CML)
“Fulham in flux” Financial Timesreport 2012London’s south-west is attracting buyers looking for analternative to Kensington and ChelseaIn 2012 39% of Fulham buyers moved fromKensington and Chelsea, resulting in asignificant impact on property values inFulhamThe profile of Fulham buyers is becomingincreasingly similar to the profile of PCLbuyers.In 2012 60 % of buyers purchasing property inFulham worth £2m plus originated fromoverseas…
The comparative cheapness of Fulham, comparedwith its higher valued neighbours, remains asignificant factor in attracting buyers to the area.A property in Fulham is likely to cost an average of£850 per sq ft, compared with an average of£1,800 per sq ft in prime central London.
The PCL trickle effect Fulham has taken on a trickle effect of prime central London buyers that are looking for a similar lifestyle as prime central but avoiding the record high pricing. This Zone 2 theory is especially popular with young families, growing families and buy-to-let investors looking to cash in on “generation rent”
House prices in Fulham 8-10% rise over the past year PCL trickleZone 2 demand 80% of properties asking price or aboveSafe investment Av On average 15 buyers per propertyForeign money selling timeYoung families 2 weeks
Trends Influx of European buyers paying asking price & above Buy to let investors and Homeowners cashing in on the current parents looking to supply/demand trend. Cashing in their home and moving out of the city. help their children onto the property ladder
2013-2014 The future Despite the general market reports that there will be little PCL growth in the capital during 2013, our figures show that the lack of supply and continued demand for property from abroad and within the UK are even stronger. We are expecting an 5% growth in Central and South West London.