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Market Analysis Spring 2011


Prime Central London


Figure 11 Central London - sales appraisals & new instructions Jan 2009 = 100


Central London - Sales Appraisals & New Instructions Jan2009 = 100


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Figure 12 Central London - prospective new buyers Jan 2009 = 100


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Figure 13 Central London - number of foreign buyers


INDIA CHINA


SAUDI UAE


INDIA CHINA


SAUDI UAE


RUSSIA ITALY


INDIA CHINA


GERMANY SPAIN


SAUDI UAE


AUS AUS


RUSSIA ITALY


GERMANY SPAIN


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FRANCE FRANCE


GERMANY SPAIN


AUS


Central London -Time to Sell (WEEKS) Central London -Time to Sell (WEEKS)


10.0 15.0


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5.05.0


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FRANCE


Central London - Prospective new Buyers Jan2009 = 100


Central London - Prospective new Buyers Jan2009 = 100


Sales Appraisals New Instructions to Sell


Central London - Sales Appraisals & New Instructions Jan2009 = 100


Central London - Sales Appraisals & New Instructions Jan2009 = 100


Sales Appraisals Sales Appraisals New Instructions to Sell New Instructions to Sell


Central London - Prospective new Buyers Jan2009 = 100


After a slow start to the New Year the prime central London property market is gathering momentum. Many commentators refer to a rush in the market to beat April’s stamp duty rise for properties over £1m, however, in London’s prime market an extra percentage point in stamp duty makes little difference in the decision- making process. Demand for quality property is the driving force of the market and nearly all central London offices are reporting a particular shortage of properties due to the lack of replacement stock for the properties sold in the final two months of 2010. Indeed, the number of sales appraisals and instructions to sell in December were down 25% and 40% respectively compared to December 2009. The number of sales instructions fell by more than three quarters (76%) between the peak in September and December 2010. However, instructions more than tripled in January (a 227% rise) and provided a welcome injection of property into the market. (Figure 11)


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As well as fresh stock hitting the market, more positive news for offices in central London is that City workers are returning to the property fold after a two- year hiatus. Bonus season has provided many with the means to buy prime property and initial signs are that those working at the coalface of international finance are confident about the future of the market and


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50 Central London -Time to Sell (WEEKS) Market Analysis Spring 2011


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are happy to invest in property. These buyers, combined with others, boosted demand in January – double the number of registrations compared to December – after the traditional Christmas drop and a flat four months to November.


Central London Average Monthly Sale Price Central London Average Monthly Sale Price Central London Average Monthly Sale Price


This surge in demand, combined with the shortage of property, has created a sub-market in central London in which quality property is being traded so quickly that in many cases properties don’t make it onto the open market by the time offers above the asking price have been made and accepted. (Figure 12)


Central London - Sales Agreed Jan2009 = 100


Central London - Sales Agreed Jan2009 = 100


Central London - Sales Agreed Jan2009 = 100


Country - Prospective New Buyers Jan2009 = 100


Country - Prospective New Buyers Jan2009 = 100


Country - Prospective New Buyers Jan2009 = 100


The number of foreign buyers in central London has fallen by more than half (56%) over the last four months as the economic conditions which made London property such an attractive investment option subsided. However, foreign buyers still make up a large proportion of central London’s new buyer registrations. Buyers from France and Italy dominate the split of foreign investors (25% and 22% respectively) but the largest proportional rise is among investors from the Middle East. Unrest in the region has caused the proportion of investors to grow from 12% to 20% as Arabian investors look for the security of central London’s bricks and mortar. Buyers from China and Russia make up 13% and 12% respectively. (Figure 13)


The rush of investors entering the market during the first half of last year culminated in the average time taken to sell properties in central London falling to its lowest point (four


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