OH, TO BE IN LONDON...
... NOW THAT SPRING IS HERE. COME RAIN OR SHINE, PANDEMIC OR NOT, THE CAPITAL REMAINS ONE OF THE MOST COVETED PLACES TO LIVE IN THE WORLD, SAYS ANDREA DEAN
OF ALL the disturbing images we’ve seen on our screens over the past year, those of London’s eerily empty streets during lockdown are most likely to have given aspiring buyers the wobbles. However, the city is very much open for business and there’s every reason to feel confident that a property you buy now will appreciate significantly in value over the coming years.
Historically, the figures speak for themselves – the average London house price has jumped from £76,848 in January 1991 to its current record high of £501,320, bouncing back ahead of the curve after every recession.
Pent up demand for housing, coupled with low mortgage interest rates and the stamp duty holiday has led to prices being higher at the beginning of the pandemic, whereas they took nearly four years to reach their former levels following the 2008 credit crunch.
Simon Gerrard, MD of Martyn Gerrard Estate Agents, is brimming with optimism. ‘While all the stress and unknowns of the past year might not be behind us quite yet, one thing we can all be certain of is a strong and confident London property market for 2021,’ he says.
‘This is no flash in the pan situation – we’re seeing steady growth across all areas of the London market, buoyed by the recent budget that contained plenty for the property sector, and signals from every quarter that this will continue throughout the year and beyond.’
Increased demand from buyers moving back into London after previously swapping city life for the countryside during the first lockdown is certain to boost prices. Research by First Mortgage shows that one fifth of those who moved out of cities in 2020 are planning to return within the next year.
‘Many people who enjoy socialising at pubs, restaurants and theatres have found that country life won’t be sustainable,’ explains David McGrail, director at First Mortgage.
‘While the 18-34s were most likely to have moved out of a city centre during lockdown, they are also three times more likely to move back.’ And according to a survey by Barratt Homes, 85 per cent of people who currently live in the capital plan to stay within its boundaries when they move.
Of course, once travel corridors reopen, competition from overseas buyers is set to heat up.
Despite uncertainty around Brexit as well as the pandemic, London has lost none of its lustre and a study by Totaljobs and Boston Consulting Group has revealed that it remains the world’s most attractive city to live and work in. Upgraded forecasts from Savills show that house prices in the mainstream market are expected to increase by 12.6 per cent over the next five years.
‘Activity has already picked up more quickly than expected, telling us that buyers believe in the future of London as a global city,’ says Frances Clacy, residential research analyst at Savills.