The autumn has brought with it a great deal of change, the repercussions of which have been felt across the country. This week alone has seen yet further changes to interest rates and notable changes to taxation. In our West London Property News Autumn 2022 report, we consider the impact of recent events and the outlook for the remainder of the year.
Motivation to move
Whilst the local West London property market has been affected to some degree by economic and political headwinds and experienced some of the traditional summer lull as people took holidays, the third quarter of the year has continued to be active across our sales offices.
The motivation for moving is more varied than it has been for some time; from those upsizing who continue to actively search for a larger home in the area to those downsizing to smaller, more manageable homes, together with a proportion of boomerang buyers who are returning to London life after a brief stint in the country.
Supply and demand
Given the ferocity of the lettings market, where 12 months ago a vendor might have considered moving into rented accommodation to facilitate their sale, this is no longer an option meaning some property sales take a little longer as vendor buyers in a ‘chicken and egg’ situation seek their future home.
However, according to Rightmove, there has been a 30% increase in the number of properties available for sale in W6 compared to May 2022.
An increase in property available for sale is likely to begin to ease the strain and enable buyers to find homes that have been seemingly elusive for many months.
Pricing sensitivity is increasingly apparent. The ability to justify the value of a property in a market facing external challenges is one of the most important attributes your estate agent can possess.John Horton, Owner and Director
“West London has a great staying power; almost all the sellers currently listed with the Horton and Garton Chiswick office are looking for another property in W4. The level of demand remains largely unaffected as so many are keen to call our patch home.”Louise Jones, Sales Manager
Selling in 2022
Despite interest rate rises house prices across the country continued to rise and in July, UK house prices increased at the highest annual rate since May 2003 according to the ONS.
Turn-key properties that are in good condition continue to be favoured by buyers. The prospect of taking on a project or completing any improvement works is unappealing given the rising cost of materials and reduced availability of tradesmen.
Well priced properties that are immediately liveable continue to receive multiple bids within days of listing, often resulting in sealed bids – many are still not reaching the property portals before a sale is agreed.
Tax and interest rates
New Prime Minister Liz Truss has made it clear she is prepared to make “difficult decisions” to boost the economy. Keen to make swift changes to stimulate economic growth, the government’s mini-budget on Friday 23rd September included a series of measures intended to reduce levies and cut regulations. Chancellor of the Exchequer Kwasi Kwarteng announced immediate and permanent reductions in the rates of Stamp Duty Land Tax applicable when buying a property. Effective immediately, there will now be no stamp duty on the first £250,000 of the property value, doubling the 0% price bracket, and for first-time buyers, there will be no stamp duty on the first £425,000, an upper limit that was previously £300,000. With increasing mortgage rates, the rising cost of living and a stock-strangled market it is difficult to forecast exactly how this reduction in tax will impact the market in the coming months and whether it will have the effect the government desires.
Seemingly pulling in the opposite direction to the government, grappling with rising inflation and a weakening pound, the Bank of England has raised interest rates for the seventh consecutive time, taking the base rate to 2.25%. Pre-emptive of this move, many buyers taking mortgages have been locking-in their rates in recent weeks to ensure they are not further affected by rising interest rates. With rate rises and widely varying products available to buyers, a professional mortgage broker can prove invaluable in ensuring you secure the best possible mortgage arrangement.
With change comes opportunity; the winners in this toughening market will be those who make well-informed and rational decisions.John Horton, Owner and Director
Rental property in West London is barely touching the open market before a let is agreed – there is strong demand for all types of homes in this fast-paced and challenging market.
With demand for rental property continuing to significantly outweigh the number of properties available to let, void periods are currently virtually non-existent in West London.
Demand might be sky-high and pushing prices upwards, but tenants are increasingly cautious and conscious of the rising cost of living and other factors that will potentially have an impact on their finances; it’s prudent for landlords to keep this in mind and consider the value in the longevity of any new tenancy.
Rents on the rise
The severe shortage of property to rent across West London has now been apparent for a sustained period. As with any market suffering an imbalance in supply and demand, prices have been impacted. There has been a circa 15% increase in rental values in the area compared to Quarter 3 2020.
This shift in rental values has meant that certain opportunities are presenting greater yields and are becoming viable options for investors, even after considering the rise in landlord costs and taxes.
Frustrated and sometimes anxious renters who’ve been unable to secure a property would keenly welcome any increase in the supply of flats and houses to let in West London.
“In this heated market, pricing correctly from the outset is of paramount importance to attract and secure the best tenant at the right rental amount.”Aggie Tukendorf, Lettings Manager
We hope the West London Property News Autumn 2022 report has proven useful to our readers. If you would like to discuss any property matters with us, please do get in touch, without obligation.