Horton and Garton Estate Agents
Reflecting on the first half of the year, 2023 has so far delivered both challenges and opportunities for those making and acting on their property plans.
The UK property market is complex and constantly changing, impacted by various factors such as economic conditions, government policies, and global events. Here on the ground in West London we have certainly experienced the trickle-down effect of macro activity over the past 6 months.
Across both sales and lettings widespread adjustment is continuing to take effect; price expectations and appetite to move having a push and pull effect across much of the local property market.
Here in Horton and Garton’s latest West London Property News Summer 2023, we consider the most recent data, local trends and share the outlook for the coming months.
Is the price right?
Property pricing is often a point of contention for homeowners, not least because it will usually affect onward property plans.
It is abundantly clear that homes in excellent condition are the ones that currently appeal the most, yet these homes are still susceptible to price sensitivity. This said, prices are continuing to march forwards at a steady, more muted pace.
Property, like any market, is fuelled by supply and demand. As demand for homes in the most exclusive neighbourhoods, such as Chiswick’s Bedford Park or Hammersmith’s Brackenbury Village, continues to grow, the supply in these pockets is not changing. Simply put, they’re not building any more Victorian houses in Brackenbury Village. It is this imbalance that will buoy local property pricing, but even these areas are subject to wider economic events and cannot demand unreasonable prices.
Whilst many have now adjusted to the higher interest rates and an increased cost of living, this adjustment, for many has simply been to lower their budget, and much of an estate agent’s role in 2023 so far has been to manage expectations.John Horton, Owner and Director
Where the average property price across London fell by 1.6% month on month in the latest report from Rightmove in June 2023, comparatively in the boroughs of Hammersmith & Fulham and Hounslow prices recorded more positive changes, with 2.1% and 0.5% price growth respectively.
The long-term move
Recent research found that homebuyers in the UK should own their property for at least 9 years in order to avoid making a loss. Whilst the report did state that with a greater number and higher turnover in London, the optimum duration might be shorter, this does pose movers with greater incentive to make a move that will stand the test of time.
Whether it is this long term view or West London’s continued growth in popularity as a place to live for families seeking more space without leaving the capital, houses across West London, particularly those in excellent condition are in especially high demand.
The cost of materials and lack of labour has put many buyers off property that requires renovation meaning homes in excellent condition can often command a reasonable premium and indeed we are currently seeing good houses on good roads achieve record prices.John Horton, Owner and Director
Multi-speed sales market
As we move through 2023 it is becoming apparent that we are experiencing a multi-speed sales market; buyer appetite not only varies significantly based on the type of property but we are seeing stark contrasts between neighbouring postcode areas and even, in some scenarios, road to road.
The most sought-after properties in the best locations are generating a hive of buyer activity, whilst in contrast other properties that likely have an inflated price tag or are in certain less desirable residential areas are taking longer to sell.
Overall the market is now largely moving at a steadier pace: where 12 or 18 months ago, in a fiercely competitive market, to be able to get access to a property a buyer might have had to be under offer on their sale or entirely chain free, the order of events has now changed and buyers are securing their onward purchase before putting their property on the market for sale.Louise Jones, Sales Manager
Affordability is beginning to act as a natural brake on rent rises as tenants choose to either look elsewhere or take smaller properties.Aggie Turkendorf, Lettings Manager
No signs of letting up
The London lettings market is showing no sign of slowing down with both demand continuing to be high and supply to the market falling. Zoopla’s latest report stated that the number of rental properties listed on their site is currently 33% lower than it was pre-pandemic.
It is not just a lack of supply that is fuelling rising prices, in many cases landlords are having to raise rents to cover outgoings, or they are forced out of the market. The rental market is undeniably feeling the effect of the measures that were phased in between 2017 and 2020 and now, for those landlords who have buy-to-let mortgages there are additional costs.
A typical landlord refinancing on a 2.2% two-year fixed rate mortgage would this year have to take a new mortgage with closer to 6% and would need to raise the rent by over 30% to cover that additional cost.
Whilst build-to-rent schemes might offer some relief to the rental market, in London these developments are few and far between, and are a drop in the ocean versus the sheer volume of demand from prospective tenants.
The summer months are historically the busiest for the London rental market as many professions move at this time of year – the sharing market is likely to be under particular strain in the run through to September.
For those landlords interested to learn more about the recently proposed changes to the UK rental market, Horton and Garton recently published an article taking a closer look at the Rental (Reform) Bill that was formally announced in May.
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.