A high demand in both London sales and lettings

London Sales

Virtually everyone one meets has a differing view of the current London residential market and what the future holds. It's worth reflecting on some facts from research which show that prime London residential property has been largely shielded from the effects of the financial crisis, which began in September 2007, when Northern Rock stumbled unexpectedly. Since then, average values have grown by a staggering 40%, with growth in the last 12 months alone at about 10%. This is unique to London: most areas across the UK have declined in value over the same period.

The number of properties that Strutt & Parker has sold for our clients is now at the highest level since 2007 and the number of cash buyers registering has almost doubled since May 2011. We can also see huge confidence from overseas investors who now account for between 50% and 75% of our buyers in certain areas. The number of properties for sale compared to this time last year is also up by 30%.

Forecasting ahead is tricky, and many who try get it wrong. But we think we can take heart from how well London property has done when other regions have not: that is the best clue to how we will fair in the near future. The confidence buyers have in the capital will no doubt be helped further by the spectacle of the Olympic Games, which will amplify the special feel-good factor that we are so lucky to have in this great city.

London Lettings

The first quarter in the London rental market has been remarkable considering the general economic climate. New tenancies are up 35% year on year across our London network. As a result, we've seen optimum prices with many new tenancies agreed for longer than the standard 12-month period. Due to high demand and short supply last year, tenants have chosen to stay put and renew into further rental terms. Sensible tenants know when to hold on to a good thing. 

Fortunately, landlords have been happy to reciprocate.The Olympic rental boom in central London has yet to materialise: local council restrictions and penalties for doing so without the necessary consents have put many potential short-let Olympic landlords off.

The rental investor has made a return, although finding a rental investment is not as easy as some might think as availability is limited. A good agent will always find a hidden gem, and bricks and mortar still appeal to those that take a mid- to long-term investment view as capital values have slightly depressed yields. As a result, the demand for property management services has increased and the portfolio of properties managed by the Strutt & Parker specialist team has grown by 25% this year. With a little air of caution, the rental outlook is good for summer and beyond.