Horton and Garton Estate Agents
As the leaves turn brown and the weather cools off, the West London property market is adopting a new ‘normal’. Over the course of 2023 the market has experienced a period of adjustment but what does this mean for the months ahead?
Here in Horton and Garton’s latest West London Property News Autumn 2023, we consider the most recent data, local trends and share the outlook for the coming months.
The New ‘Normal’
The freneticism experienced during the pandemic is an increasingly distance memory as the property market spent most of the year finding its feet after the breaks were abruptly pumped at this time last year. Since then, there has been a necessity for widespread adjustment across London, and we’ve certainly experienced this change here in West London.
Horton and Garton have witnessed and mediated stand-offs between vendor and buyer over the past year as vendors have had to adapt to a market less weighted in their favour, and buyers adjust to a new lending landscape. No longer are buyers expected to only be out viewing or offering when they are under offer or even sold, but instead, buyers are now often only making their current property available for sale when they have found a home they would like to buy.
A steadier market, and one where the odds are not tipped heavily in sellers’ favour, requires a different strategy, sellers must look to their selling agents for honest advice and clear guidance in order to successfully sell.John Horton, Owner and Director
A reflection of the speed at which the market is moving, there are now steadier and carefully considered movements similar to those seen pre-pandemic, before the ‘race for space’ and stamp duty holiday pushed the UK’s property market to dizzying heights.
Is it All Doom and Gloom?
In the past month, 36.3% of properties listed for sale encountered a price reduction, according to Rightmove’s latest report. Sellers taking too strong a stance at the outset of marketing are quickly finding themselves with a lack of interest from buyers. When there’s added pressure on buyer finances budgets tend to be much stricter.
A healthy dose of realism goes a long way in today’s market. London experiencing below-average growth rates over recent years means that property in the capital is in fact more affordable than it was 5-7 years ago. Average London house prices dropped by 1% in August alone, and the predictions expect them to fall by another per cent by the end of the year. It is important to keep headlines in perspective, yes property prices have fallen marginally this year, but they are falling from a high height – average UK property prices are still 19% higher than in August 2019.
In the final weeks of September there was positive news for those moving with a mortgage, although rates remain higher compared to December 2021, the Bank of England’s recent unexpected decision to maintain its key interest rate at 5.25%, halting what would have been the 15th consecutive increase, should lead to a decline in mortgage rates, according to brokers.
It is anticipated that there will be heightened competition among lenders soon, but changes are predicted to be gradual, with little chance of a Bank rate reduction in the imminent future. This decision brings immediate relief to around 1.4 million individuals on tracker and standard variable rate deals.
Pricing, Pricing, Pricing
Falling property prices don’t indicate that buyers have sellers on the ropes; demand for well-priced homes in good condition is strong. In the past two weeks, Horton and Garton’s Chiswick office is currently registering around 4 times as many buyers as it did so earlier in the year and is receiving multiple offers on homes of all shapes and sizes – when priced correctly.
Horton and Garton continue to beat the ‘realistic pricing’ drum and Rightmove’s report supports this clearly, with the figures showing that properties priced right from the outset find a buyer on average in 27 days, less than half the 66 days that it takes on average to find a buyer if the home requires an asking price reduction after it has come to market.
Those who may have decided to pause plans and take stock following the shift in tempo this time last year are now returning to the market and adapting plans to the current marketplace.Louise Jones, Chiswick Sales Manager
Whilst rents are high, there is a limit to a property’s value and landlords can still fall foul of overpricing and suffering a void period and eventual price reduction. At this time it is particularly crucial for landlords to be aware of the contract they’re signing with a lettings agent to ensure they aren’t tied in for an extended period with an agent who might be overpromising to secure business.Aggie Tukendorf, Lettings Manager
Cheaper to rent than buy?
Demand for rental property continues to be at a fever pitch as an unwavering number of potential tenants seek places to live. It’s recently been reported that London rents have risen by 11% year-on-year with another source predicting that the capital is to experience as much as a 25% hike in rental values between 2022 and 2026.
Though the sales market across West London continues to be active, the latest research from Zoopla has indicated that, for the first time since 2010, across much of the capital it is now cheaper to rent than it is to buy a property with a mortgage, despite rental prices continuing to rise.
Many of those who are already living in a London rental property are increasingly opting to renew their contract instead of searching for a new place to live meaning renewal rates are currently strong.
Relief for Landlords
The recent announcement by Prime Minister Rishi Sunak to scrap the impending energy efficiency has offered some relief to Landlords across West London. The alterations to EPC standards were slated to be enforced in 2025, necessitating all properties involved in a new rental agreement to attain a minimum EPC rating of C or higher.
While some landlords may find relief in this decision, particularly in the current economic climate, this might prove frustrating to those who had already invested significantly in enhancing their properties’ energy efficiency in anticipation of the new rules. Several landlords have even exited the rental market due to the perceived impracticality and financial stress linked to the proposed enhancements, which has undoubtedly had some ripple effect on the reduced rental property availability and increased rental prices.
With strong demand from tenants and rising rents, together with this shift in plans to change key policy, we expect to see landlords who had previously considered selling, now opting to stay in the market creating a more positive outlook in the medium to long term.
We hope this latest edition of the West London Property News has proven useful to those considering moving in the area. If you would like to discuss any property-related matters with us, please do get in touch, without obligation.