LONDON MARKET ROUNDUP
The late spring of 2020 will undoubtedly go down in the history books as one of the most tumultuous in British history. For anyone looking to buy or sell their home, it meant putting plans on ice and staying put for the best part of three months as the market went into a deep freeze.
As this freeze began to thaw in late May, most buyers and sellers who had agreed deals prior to the onset of the pandemic but had not exchanged, kept to their word. Buyers planning to live in their home for the long-term in particular remained committed to purchases. Where London vendors did lose a buyer, 26% were subsequently able to achieve a higher price than previously agreed.
The easing of lockdown, coupled with a cut to most stamp duty bills, has brought a host of new buyers into the market. For the first time since late 2014, buyer numbers across every London borough are higher than they were at the same time last year, with 18% more purchasers registering in July 2020 than last year. The large number of new buyers starting their search suggests that the usual summer slowdown seems unlikely this year with house hunters committed to playing catch-up and the prospects for a summer holiday fairly limited. 
For the first time in six years buyer numbers are up in every London borough……with the largest increases reserved for outer, more suburban zones.
First-time buyers have made up the bulk of this uplift with 38% more registering in July than at the same time last year. Investor numbers in the capital are also up 11% over the same period but from a low base. Investors already in the market had typically been struggling to get a foothold, with a mismatch between their own and vendor price expectations.
While coronavirus could have been a cliff edge moment for the London market, a shortage of stock has ensured it was not, with prices in the capital underpinned by relatively few homes on the market. Across London there are 6% fewer homes for sale than at the same time as last year, with homes coming onto the market at pre-pandemic prices of early 2020. A limited amount of new stock has meant over two thirds (69%) of homes sold in June came onto the market before lockdown commenced.
There are signs however that the health of the market coupled with a stamp duty holiday have started to tempt would-be sellers off their hands, bringing forward moves that would have happened later in the year. Market appraisals in the capital are running at 33% above last year’s levels (10% up outside London) suggesting sellers have a positive outlook for the second half of 2020.
This pent-up demand has translated into tangible interest for vendors…
..with both pre and post lockdown instructions selling. Homes that came onto the market before April have made up 63% of sales since lockdown was eased.
FOCUS ON: TIME TO SELL
One of the early trends to emerge as the housing market reopened has been the reassurance of the capital’s established suburban markets. They have long been a bellwether for the London market as a whole, and have been among the first places to see the largest uplift in buyer numbers over June and July. While many of London’s older suburbs are typically not as well connected to central London as neighbourhoods further in, over the last few months buyers have become less worried about transport links and more interested in the home itself.
With more time spent in the house, buyers have begun to revaluate what they want from where they live. And a garden, or at least access to a shared one, is increasingly near the top of buyers wish lists. Around half of homes sold in London so far this year have access to a garden, ranging from around a third in zone one to over three quarters in zone six. And in the months since lockdown began, a divide has emerged between the time to sell a home with and without a garden.
During July, homes with a garden in London sold 33 days faster than those without (across the UK it was 20 days). Last year, the gap was just 14 days in the capital. As the market adjusts to a new normal, this differential has grown to the widest it has been since records began. The desire for green space also translates beyond the time to sell and into what those sellers able to offer a garden can achieve. In the last month homes with a garden in the capital have realised 1.1% more of their initial asking price than those which do not – 99.6% against 98.5%.
This differential in the time taken to sell comes on the back of homes across London (and the rest of the country too) being on the market for longer as viewings were prohibited over lockdown. Homes sold as the market reopened had been up for sale for an average of 120 days, more than twice as long as the same time last year (although if the time spent locked down is excluded, the figure is comparable to July 2019). Subsequently time to sell has steadily declined throughout June and into July, in suburban outer London markets in particular, as buyers resumed their search in earnest.
Aneisha Beveridge, Head of Research beveridgea@hamptons-int.com David Fell, Senior Analyst felld@hamptons-int.com
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