PROPERTY NEWS Zoe Dare Hall

A hot summer for SPENDING

A ‘remarkable year’ for property continues, with London set to pick up the pace, writes Zoe Dare Hall

So here we are, in our second summer of mostly holidaying at home. Yet from a property perspective, it’s rather different this time round.

Where last year was marked by “panic moves” from city to country, comments Alberto Cordero at Best Gapp, “there is a greater degree of confidence in the market 15 months on. We have learnt to live with the current situation and the assurances we now have with the vaccine.”

Sales numbers will still look good compared with pre-pandemic times, but not as manic as last summer, he thinks. “Buyers will be more selective – particularly those moving from Zone 1 to Zone 2, or upsizing from Chelsea to Hampstead or Queen’s Park in search of outdoor space or extra bedrooms,” says Cordero. “Although there is still an appetite for family houses, buyers are not willing to pay a premium and we have now entered into a price-sensitive market.”

This summer also sees the dying months of the stamp duty holiday, introduced in June 2020 and now tapered until it fizzles out on 1 October. Although its material impact on higher-end buyers has been limited, its wider effect has been a positive one, thinks Patrick Littlemore, CEO at Marsh & Parsons. “No one trading at £1m upwards has that much regard for a £15,000 saving, but further down the line, money is coming into the food chain.”

This is one holiday, however, that Tom Bill, Knight Frank’s head of residential research, is glad to wave goodbye to. He describes the tax holiday as a “commendable” move at the height of the pandemic, but one that has now “overstayed its welcome”. It may have added some extra froth to the market, but it also whipped up panic among buyers, leading to sealed bids, over-wrought conveyancing solicitors and a shortage of removal vans.

Even without this tax break, “we would still be talking about a remarkable year compared to initial expectations,” says Bill, who cites March as a record month for transactions in the UK, and more money being spent in the housing market over the past year than before the global financial crisis. Indeed, this season is set to be “Britain’s first £100 billion summer”, according to forecasts from UK Living Research, which – based on the recent trajectory of the housing market – estimate 420,000 sales across the UK from June

10.2%

UK HOUSE PRICE GROWTH, THE HIGHEST SINCE 2007

£107BN

VALUE OF ESTIMATED UK HOUSE SALES FROM JUNE-AUGUST

HOTSPOTS Above: Three-bedroom home near Barnes Village, £2.45m, Marsh & Parsons. Below left to right: Soak up the sun on the terrace of this Talbot Road flat, £1.85m, through Bective. Further north in Kensal Rise, enjoy the garden of this spectacular semi on Okehampton Road, £2.4m, Marsh & Parsons

to August at a record spend of £107bn. The end of the stamp duty holiday should help to bridge the gap, however, between a sluggish prime central London – which has recorded 1.9 per cent below last year’s level for May according to LonRes data, and the rest of the country, where annual house price growth is 10.2 per cent, the highest since 2007 according to data from the ONS. “With the stamp duty holiday now all but over, the numbers point to the regions slowing in demand and London taking its place again as the focus for house price growth,” comments Nick Charnock, managing director at Bective.

Following on from three months of “enormous transactional activity”, adds Littlemore, this summer promises to be a busy one in London as travel restrictions continue and people focus on their homes instead. Areas such as Notting Hill and North Kensington, with great appeal among domestic buyers, are still active, he says, “and Queen’s Park is an ongoing success story as it caters to so many different levels”.

The absence of foreign interest in the likes of Belgravia and Kensington has also made way for domestic buyers, adds

Cordero. “Transactions are taking a little longer and not necessarily achieving the high premiums that foreign buyers tend to pay in new schemes, but there are healthy offers and it’s a pleasant change to see properties purchased by local residents and maintaining the sense of community,” he comments. All eyes, now, are on the return to the office – two or three times a week, anyway, which most people seem to think is the ideal – and what that will mean for demand for central London property.

“The seeming exodus to the country was something of a fad and canny investors are returning to London property, given it remains one of the top five global investment centres,” says Charnock. “As normality prevails, so will London’s property market.”

A more part-time approach to office life, though – or continued working from home – is already steering tenants in the prime lettings market to different areas beyond the Prime Central London norm.

“The corporate relocation market is coming back, but people aren’t talking about the commute to work. It’s more about the style of property they want,” says Littlemore.

“We’re seeing big interest in Barnes. People want somewhere with good transport and a village atmosphere on those work-from-home days.” L