Summer benefits both sellers and landlords
London Sales
Unsurprisingly, demand is exceeding supply with homebuyers retracted into their shells for the traditional summer calm this August. The figures this year indicate a certain tidal change compared to the same period in 2008. Across London properties, the amount of offers being made went up 60% on an annual basis while exchanges 78%.
Although the flood in supply that many envisaged would happen did not after all, vendors are still re-entering the market. Instructions were up 30% this August on a yearly basis. This was mainly due to the prevailing good news that sales were reaching the market even though there are substantially more buyers than sellers, as highlighted in our research this month.
Since the beginning of the credit crunch two years ago and the end of Lehman Brothers, confidence is starting to break back onto the market’s shores in waves. The time for would-be sellers to start taking advantage in demand is at hand.
London Lettings
London stock levels were quite tight in August. We witnessed a 10% fall from the previous month and 15% decline in comparison to this same time last year. The amount of properties being put to rent has diminished whilst the sales market continues to even out. This should be taken as good news by landlords who have been losing sleep over reducing rent in recent times. Shortage in property for rent should have a positive impact on rents being put up. Rents averagely rose by 0.3% through the second quarter of 2009 – a very modest increase – and we believe they should carry on rising over Q3-2009.
Even with a fall in new applicant levels of 15% last month every property available in London still has roughly 3.6 applicants each – a very changed outlook compared to 2008 where supply outnumbered demand in most areas.
Prospective tenants looking for accommodation must now act quickly once an ideal home is spotted or they risk losing it for another applicant that pays the deposit more promptly. We cannot emphasise this enough, especially since in the past balance fell more favourably in the tenants’ side and many managed to rent larger properties at competitive prices. With the current demand-supply disparity, lettings are being made at asking price or a very close amount.
Research by Hamptons International – property management agency
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