INCREASED ACTIVITY LEVELS
Last year saw the UK voting in a majority government which pledged to make buying and building property easier and to bring more movement to the market. Both our Sales and Lettings managers predict that this year will see a level of stability and enthusiasm emerging, in contrast with last year's caution as the nation waited first for election results, then for government proposals.
"Offers received so far this year has indicated to us that there is significant faith in the spring pricing of property from the buying audience with offers received this year averaging 98.6% of asking price."
says Sales Director Ewen Bunting.
"This indicated to us that there may be some upward movement in asking prices over the course of Quarter 1 of 2016 as agencies price their properties with increasing confidence that the demand can satisfy their supply."
Gradually increasing levels of activity lead to a more confident market - registration levels at James Pendleton have been higher across the board than this time last year. These increases covert to greater, and more frequent, investment.
This applies to lettings as well as sales. After 2015's relative stasis as homeowners waited for election news, this year a greater proportion of landlords and tenants are on the move, particularly into and out of large family houses, our Lettings Area Manager Will Dear explains,
"This year, landlords and agents are benefiting from an electric start to 2016, standing the lettings market in good stead to move on considerably from what was an indifferent year. As expected, we have experienced high volumes of viewings since returning from the festive break; however a pleasing sign is the conversion of these viewings to offers for our landlords, with many of our clients benefiting from higher rents on the back of multiple bids on their investment. We also predict that this will be a big year for larger properties, as specialists in large family homes in South West London, we have found that demands from local families and corporate clients looking for premium homes has surged since the turn of the year."
STAMP DUTY INCREASE
One moment which every department at James Pendleton expects to bring change is the increase in Stamp Duty on second homes and investments which is set to come into effect this April,
"The changes in Stamp Duty Land Tax while beneficial to the majority of our buyers has caused concern and a cooling of the market towards the top end of our marketplace. We believe that with time this will become 'the norm' and will cease to affect the activity at this level. One factor that has thus far not seen a great deal of affect to the market is the government's indication to increase the SDLT payments made by people buying an 'investment' property. It is not clear as yet as to how these "second" home buyers will be categorised and as such many buyers looking to avoid doubt are entering to the fray to secure property prior to any liability to them for this additional 3%. We predict that following 1st April inception of this increase it may take a little while for the buying audience to realise its impact. We predict that a true buy-to-let investor will simply factor any additional outlay on SDLT into the price that they are prepared to pay. In short we do not see this as a devastating factor to the property market in South West London and predict that this year will be a far more stable environment in which to sell or buy property. As an acid testament to this we are seeing a far greater success in the £2m to £5m range as buyers have become far more accustomed to the historical increases to their SDLT contributions and this has now become far less of a factor in these transactions."
Similar projections apply to the lettings market, William Dear informs us that;
"The strength of lettings in South West London is an irresistible draw for any investor, from those looking to dip their toe into the market for the first time, to our seasoned landlords returning and looking to build an existing portfolio. As a result we are expecting a surge of investment buyers and sellers in the sales market before 1st April, fuelling a summer in lettings that has the potential to exceed all expectations."
2016 will be a seminal year for our Land, New Homes & Investments department with many developments coming onto the market and the ongoing regeneration of the Battersea and Nine Elms area. New Homes Director Sam Wylie gives his opinion on this sector of the market,
"Although the investment market will be challenging, the broad range of product available in our portfolio, will deliver the required returns for these exclusive buyers. We are yet to see the impact of the stamp duty changes on the buy-to-let market, we do however expect it to encourage the drift from prime central London, to the more financially accessible parts of the market in South West London."
There is also news of numerous developments launching in the first quarter of the year, all offering the very best in facilities, such as parking, concierge, gyms and on-site shops and restaurants;
"We have several launches to look forward to in the first quarter of the year, starting with 30 York Road SW11, a stunning and unique collection of 1,2 & 3 bed apartments in a fantastic location. Bentley's Yard SW4 is an ultra-modern set of 6 townhouses by the same architect as the iconic Clapham Library. The final phase of the highly sought after Battersea Square Mews SW11, comprising of 4 mews houses, will have a show home ready for the launch at the end of February."
To summarise, it appears that 2016 will be a year of two halves. Prior to April, investors and landlords will be signing contracts on second properties and buy-to-let investments as the market adjusts to the new stamp duty rules. This early activity will create movement throughout the summer in the Lettings market as new landlords look for tenants. In the year following the general election, property market activity is on the increase as confidence in the market translates to action and investment.
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