Horton and Garton Estate Agents
As we begin to see the signs of spring, is the West London property market set for a traditional ‘Spring bounce’? Will we see greater levels of activity and transactional figures increasing?
Here in Horton and Garton’s latest West London Property News Spring 2023, we take a closer look at the local market trends and emerging themes that will likely have significance over the coming months.
Mind the gap
There has been a steady increase in the number of homes becoming available for sale across West London, and the number of active buyers is increasing too, however, at times there has been an apparent disparity between vendors’ expectations of value and the price a buyer is willing to pay.
Those financing a move with a mortgage will welcome the slowly lowering mortgage rates which on average have fallen back from their peak last year, with average rates for a 15% deposit five-year fixed mortgage now 4.65%, edging down from last month’s 4.75%, and far lower than October’s 5.89%. Though this continues to be a readjustment for many borrowers considering that just 12 months ago, average mortgage rates were 2.48% in March 2022.
With greater stability in the mortgage markets, the number of buyers returning to the market has gradually increased throughout 2023 so far. Rightmove reported a 6% increase in active house hunters compared with the same period in 2019.
Pricing will play a vital role in each and every property sale over the coming months. The local market is less frantic and though there is strong to be appetite to buy, pricing is key given the increased costs to borrowers.John Horton, Owner and Director
Patience and persistence
There are clear indications that the property market is normalising, whilst the average time to agree a sale on a property listing in London is now reported to be 13 days longer than a year ago. According to Rightmove, the period is down from 74 days at the start of 2023 to now 70 days on average, showing an indication of a spring resurgence, and moving cautiously towards traditional seasonal market trends.
Sellers coming to the market now must consider their strategy for listing carefully, inflated prices are not being well received and discourage potential buyers from the outset.
Over the past few years, sellers and buyers alike had adapted to a fast-moving market where online details and research coupled with a single in-person viewing would be enough to warrant a buyer offering and proceeding to purchase. With more at stake now that margins are increasingly tighter for those moving, buyers are deliberating more and attending second and often third viewings before offering.
Here at Horton and Garton, we have seen this increase in viewings first-hand. In 2022 there were an average of 17 viewings at a property prior to a sale being agreed upon, whereas in 2023 there has been an average of 33 viewings before a sale is agreed.
So far in 2023, we are finding ourselves in a multi-speed market. Well-positioned, uncompromised properties in good condition, and priced correctly, have had a queue of buyers, and have either sold off market or via sealed bids. Sellers must adopt a strategy to fit the market, and the buyer demand specific to the type of property they’re selling.Louise Jones, Sales Manager
Outlook for the West London sales market
A hangover from the post-pandemic boom, some vendors who may have listed close to September’s ‘mini-budget’ and the events that followed thereafter may have initially come to the market for sale at a price that now seems inflated compared to homes listed as new so far this year and may need to readjust in order to sell. In February, data from Hometrack showed that on average, sellers were having to accept a 4.5% discount on their sale price compared to 6 months earlier in order to achieve a sale.
Though the market is moving at a slower pace, it is moving. With rental prices still increasing, buying a property, despite mortgage rate rises, remains to be a more attractive prospect for many. Furthermore, those upsizing or downsizing for example, who have fundamental requirements that mean they must move, will simply continue to do so further adding to the appetite to buy and sell in the coming months.
As we enter the spring there is a feeling of momentum building, as we feel each year at this time, it might just be that home movers are a little more considered in their approach. Patience and persistence will be important to those wishing to move.
Rental market remains strong
Whilst demand remains strong tenants are unwilling to pay over the odds. A void period can quickly negate any increase in rent; landlords pricing correctly are finding good tenants and in a timely fashion.Aggie Tukendorf, Lettings Manager
Rental price growth has now very clearly outpaced property sales price rises for some months across London, by the end of 2022 average asking rents across Greater London had increased by 15.7% and rental demand in Q4 was up 53% on the same period just a few years earlier in 2019.
Whilst the number of properties available to rent has gradually grown, the demand continues to be greater than the supply of homes on the market meaning the West London rental market continues to be fast-paced.
Despite rent rises and high demand, each property has a ceiling value. Tenants are unwilling to pay hugely inflated prices and those properties brought to market with an unreasonable price tag are not moving as quickly if at all, risking void periods. Sensibly priced rental properties are seeing considerable interest and are still receiving multiple offers.
Onus on due diligence
With rising incurred costs, increased rents have been welcomed by landlords as this has offered some financial relief and perhaps led to fewer landlords selling their rental properties. Whilst yields increasing is positive for landlords this can put greater financial pressure on some tenants.
There is now considerable value in a good letting agent, one that carries out stringent checks and extensive tenant referencing, only introducing occupants who appear to have long-term stability and not extending beyond their means due to the lack of stock and availability.
With many properties receiving multiple offers, it is important for landlords to consider all aspects of any interested parties.
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.