We attribute the increased summer buying activity to the following factors:
Expected summer season activity
As mentioned in our May market update, there has been a noticeable increase in activity from overseas and domestic buyers over the past 10 weeks, which we attribute to a number of factors.
Firstly, the summer months are always busy with overseas based buyers looking to acquire London property whilst they spend their summer weeks here. We have many overseas clients who will fly to London specifically for certain events such as Wimbledon, Masterpiece and Ascot races. It is therefore expected that overseas buying activity increases to coincide with the summer months, and this year has been no exception.
It is worth noting that the London cultural scene – alongside of course our excellent education system, strong property law and much more – continues to underpin London’s popularity as a destination to spend time in and invest in property-wise.
Currency plays continue to appeal – not just to overseas based buyers
Secondly, currency savings which many of our overseas – and indeed UK based – buyers are enjoying have also made buying opportunities even more appealing. Many of our UK buyers are international (Europeans and Americans living in London are particularly prominent right now) and they often still hold significant portions of their liquid wealth in Euros or Dollars, so many domestic buyers are enjoying currency savings too. This has made good value buying opportunities even more compelling when the currency saving is taken into account.
New increased political stability & likelihood of pro-property policies
Thirdly, many buyers have been holding off buying due to the threat of a potential Labour government. However, this concern started to diminish in many of our buyers’ opinions, once it became more likely that Boris Johnson would be elected as the UK’s new Prime Minister. Whether or not they agree with his policies, Boris is widely deemed to be the strongest candidate to beat a Labour government should we face a general election.
The reassurance that the Tories – who are generally more sympathetic to the high end property market – are likely to remain in power has been a big relief for many of our buyers.
Life goes on – particularly with a 5 year view
Finally, there is of course still significant uncertainty facing the market, and there are many would-be-buyers still sitting on the side-lines. But the ‘life goes on’ attitude is still growing and the general consensus is positive for London over a five year time scale. This is driven by buyers who are needs based e.g. moving out of rented accommodation, moving for schools, upsizing, downsizing or getting divorced. Or as one of our bachelor entrepreneur clients said to us recently: “There is always a reason not to buy, but I just need a home”.
For those buying now, we are advising them to purchase for a minimum five year period, given that purchase and sale costs can come to approx. 10% – 15% before they break even or make a profit.
The profile of buyers we are acting for at the moment is very diversified, ranging from different nationalities, life stages and industries from senior investment banking executives, company CEOs and entrepreneurs buying for themselves in the £6m – £10m price range, to family offices and overseas buyers building investment portfolios or one-off buy to lets in the £650k – £1.75m price range.
If you are considering potentially buying and would like to discuss your options, please feel free to contact me or the SP Team: +44 (0)20 7244 4485 or firstname.lastname@example.org