Prospective UK buyer numbers remain high as the property market shifts into Autumn. This is being driven by steady growth in first time buyers at the entry-level, as well as prime-focused ultra-high net worth individuals (UHNWIs). Advanced economies are experiencing an uplift in employment and output whilst minimal impact to the financial sector in global epicentres such as London has induced upwards pressure on values.
The latest IMF forecast upgraded the UK forecast for 2021, should vaccines remain effective against new variants of covid-19, to seven per cent growth. London has long been a pivotal engine of this growth. This looks set to continue with the latest Lloyds Bank's annual sentiment survey of 100 institutions indicating that the high-earning majority have remained in the city, and over two thirds expect the capital to maintain global importance.
The recent European Banking Authority survey reveals that of the 3,614 UK banking UHNWIs earning 1 million euros per year, only 95 high earners left the UK in 2019/20. A much greater total was assumed given the combined effects of Brexit and the pandemic. In fact, Britain lost only circa 7,000 financial services jobs as of January relative to 190,000 based in the city and 1.1m in the sector nationwide.
London is ranked highly as a desirable, safe, international city offering a panoply of rich historical and cultural as well as gastronomical amenities. Positive growth has been spurred by continued domestic investment alongside an opening up of travel restrictions enabling buyers from abroad greater access. As of 4 October, new rules in place will serve to reduce constraints and simplify the process for participating in the capital’s real estate market.
Prime central London experienced its strongest half-year in both volume and value terms according to Savills, whilst regional growth also spurred house prices to grow 2.1 per cent in August according to Nationwide. There have been 28 per cent more mortgage approvals in 2021 so far, relative to 2019, with Savills data showing first time buyer numbers were up 63% in June 2021 relative to June 2019.
The number of new prospective buyers registering in August was 24% above the five-year average. Meanwhile, underlining how many sales remain in the pipeline, the number of offers accepted was 32% higher over the same period.