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House Prices - UK and London £600k 5.0


£550k


0.0


£500k £450k Market Analysis Winter 2010/11 Average Time frominstruction to sale agreed (WEEKS) £400k


Figure 10 London - sales agreed


Uk


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50 0


London


Prime Central


London Central London settles down after exaggerated 2009


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50 0 Sales Agreed


Figure 11 Central London - prospective new buyers


200


11 e* 2.0% 2.8% 3.6% 1.56


0.90%


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20 40 60 80


0 200


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20 40 60 80


0 Number of Prospective NewBuyers


Figure 12 Percentage of foreign buyers


JAPAN 5% CHINA 10%


SAUDI 5% UAE 7%


CHINA 10%


SAUDI 5% UAE 7%


JAPAN 5% Number of Prospective NewBuyers


Central London - Prospective new Buyers Jan2009 = 100


Central London - Prospective new Buyers Jan2009 = 100


100 150 200 250


50 0


During late 2009 and early 2010 the central London property market was awash with investors looking to capitalise on poor global economic conditions, uncertain capital markets, and meagre returns on investment products. This exaggerated demand caused a mini boom in the capital’s prime housing locations with average prices peaking in July 2010 at £971,263 (8% up on January’s average price £896,223).


Central London - New Instructions to Sell Jan2009 = 100


100 150 200 250


INDIA 6% INDIA 6%


FRA 14% FRA 14%


USA 3%USA 3% AUS 2%


GERMANY 2% SPAIN 5%


AUS 2%


GERMANY 2% SPAIN 5%


RUSSIA 16% RUSSIA 16% 15.0 ITALY 25% ITALY 25% Central London -Time to Sell (WEEKS)


Since the peak in July, various factors have caused the central London market to settle down and adjust accordingly. Much of the foreign investment in London was driven by sterling’s poor performance against the euro. The euro- crisis that unfolded over the second half of 2010 allowed sterling to recover some lost ground against the euro and diminished the lucrative opportunities for European investors in the capital. As a result new buyer registrations in central London have been flat over the second half of 2010. In the six months to November 2010 new buyer registrations were 17% down on the previous six months.


50 0


New Instructions to Sell


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0


100 120 140


5.0 Central London -Time to Sell (WEEKS) 15.0 0.0 10.0 70%


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New Instructions to Sell Annual Change (2010 vs 2009)


10.0


Foreign buyers still dominate in locations such as Knightsbridge and Mayfair, but there is also demand from wealthy British


Sales Agreed Market Analysis Winter 2010/11 9


Central London - Sales Appraisals Jan2009 = 100


families looking to invest in property in certain locations, the returns from which can be much more lucrative than other investment products. (Figure 11)


Central London - New Instructions to Sell Jan2009 = 100


New Instructions to Sell Average Monthly Sale Price


Foreign investors still make up a large proportion of central London’s new buyer registrations (around 69%) with some offices reporting almost exclusively foreign buying in their respective markets. The overall split between foreign buyers’ countries of origin remains relatively constant; however, some offices are reporting growth in the number of investors from China and the Far East. These buyers make up 15% of all foreign buyers in central London at the moment and it will be interesting to see if these buyers grow further in number. Buyers from Russia and Italy continue to represent the highest proportion of foreign investors at 16% and 25% respectively. Buyers from the Middle East make up 12% of the total and have continued to register interest beyond the traditional summer period of Arabian investment in central London property. (Figure 12)


Sales Appraisals


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50 0


Average Monthly Sale Price


Central London - Sales Agreed Jan2009 = 100


Central London - Sales Agreed Jan2009 = 100


The property market in central London is stock driven and there is always appetite for ultra prime property. When these properties come onto the market they sell quickly and are able command multiple offers. However, ultra-prime stock is scarce and demand for what is deemed “secondary” stock (basement and ground floor flats or properties on busy roads) is lower. These types of properties tend to stay on the market for longer; this has increased the average time


Sales Properties o Jan2009 = 1


Properties on M


Prospective New Buye Annual Change (2010 2009)


-35% -30% -25% -20% -15% -10% -5% 0% 5%


10% 15% 20%


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