In a remarkably similar pattern to the Great Financial Crisis of 2008, the London Prime Property market has experienced a surge in deals agreed since the end of the lockdown in May. The housing market’s rebound has been underpinned by rising landlord confidence, epitomised by the rise of Buy-To-Let (BTL) activity which brokers are reporting countrywide.
The latest analysis from Knight Frank outlines the scale of this uptick in Prime sales momentum; with sales agreed on properties valued in excess of £1 million jumping 100% higher compared to the same week in 2019. Similarly telling are the figures for properties in the £750,000 to £1 million range, which show a 119 per cent increase. This speaks to a number of factors coalescing in favour of greater market activity including recent stamp duty cuts, behavioural shifts as buyers upscale their expectations, pent up demand and heightened BTL appetites as landlords expand their portfolios.
In fact, PropertyWire details that 57 per cent of brokers, who report greater BTL purchasing activity and enquiries in recent weeks. The survey, undertaken by online broker forum Cherry, indicates that more than 30 per cent of brokers have seen an increase in individual purchases and a 27 per cent lift in limited company purchases. This is in line with HMRC’s seasonally adjusted figures which show that for July there were 70,710 property transactions in July, this was 14.5 per cent more than in June.
Investors are anticipating increased demand for rental properties given long term restrictions in UK housing supply, economic uncertainty affecting consumer financial confidence in progressing with purchasing decisions, and the resilience of Prime markets historically. The recovery at the top end of the market has been pronounced, which creates opportunities for buyers in this segment who are better positioned to facilitate transactions.
With the number of offers accepted in the second week of August 2020, around 68 per cent higher in London year-on-year, and the UK widely considered a haven for BTL investment, this positive outlook with regards to demand & prospective yields is proving particularly attractive to prime investors.
Sales data from Rightmove during the week ending August 16th shows a 61% jump compared with the same week the previous year.