Opinion: Uncertain times are leading to London property ‘microclimates’
The fluctuations and instability experienced by the capital’s housing market continue to be underpinned by, for want of a better phrase, ‘Brexit uncertainty’.
A market once dictated by patterns and trends has been shaken by political turbulence, leaving buyers and sellers with little direction on how to navigate it, which is ultimately resulting in inconsistencies in market performance.
Findings from our latest report reveal that the average house price in prime central London now stands at £1.04m – a 15.2 per cent decrease that takes us back to figures we haven’t seen since 2014. Falling house prices in both central and outer London are undoubtedly a loss for vendors, but in some instances a gain for prospective purchasers.
Such vulnerabilities and opportunities in the market are more exposed than ever before, causing purchasers to flex their negotiating muscles harder and even look elsewhere within London in search of more house for their money.
With some buyers steering clear and others pushing hard, microclimates are emerging within London at a scale we’ve not seen before. Prime central London has always lived in its own bubble – but we’re seeing smaller pockets of inconsistencies that demonstrate market divergence.
A market once dictated by patterns and trends has been shaken by political turbulence
For instance, whilst Fulham and Wandsworth have historically performed at similar levels, we have witnessed disparities in recent months. This is largely due to properties in Fulham commanding a higher premium compared to Wandsworth, and the upper end of the domestic buyer market remaining quiet. Wandsworth, on the other hand, is proving more buoyant, with price points allowing those further down the ladder the opportunity to negotiate and secure a property for a good price.
It is no surprise that the uncertainty surrounding our political situation is at the root of our market’s challenges but it’s the differing reactions from purchasers that are intensifying these inconsistencies. At one end, you’ve got first time buyers and second steppers pursuing better value for money. In the middle, you’ve got families who have decided that they can no longer put their lives on hold and are proving to be quite transactional. At the top end, you have UK domestic buyers who are still waiting in the wings for prices to stabilise and for more stock to arrive – and then you have the likes of US purchasers who are taking advantage of the weakening pound against the dollar.
Dependent on location, price bracket, concerns over Brexit and motivation to buy or sell, there are numerous factors that are causing inconsistencies in the market.
Our advice to both buyers and sellers would be to do their research and consult a credible agent. Have a look at what price similar properties have sold for in the last six months rather than what they were marketed at. This is the best indicator of what’s achievable in terms of a purchase or sale.
Lisa Simon is head of residential at property agent Carter Jonas