Crash or comeback? FABRIC PROPERTY SPECIAL
After an unprecedented lockdown, the property market in London has now reopened, but will it recover from months at a standstill? Our agents explore the outlook WORDS by LIZ SKONE JAMES PHOTOGRAPHY by KATHY ANNE LIM
Wherever you live, you can’t ignore the fluctuations of London house prices: from lows after the financial crash in 2009 to a peak in 2017, prices here act as a barometer for the whole country. According to data from Savills, property prices in the Capital fell 21.5 per cent in 15 months over the course of the credit crunch, going on to make a miraculous recovery, rising a staggering 95 per cent by 2017. Brexit uncertainty saw a slight subsequent drop, but a return to a majority government in last year’s election ensured that annual growth returned to 2.3 per cent in February this year. The events of 2020 are totally unprecedented though, so what now? These are certainly strange times, agrees Glentree Estate’s Trevor Abrahmsohn:
Your home, your life
“I have been serving this industry for 45 years and have worked through four recessions, but nothing can compare with the last three months,” he says. “The previously thriving UK economy has been transformed into an intensive care patient. Pre COVID-19 we had almost full employment, 80 per cent national debt, very acceptable growth of 1.5 per cent and a tolerably low budget deficit of under two per cent. In a matter of months, this has morphed into an unemployment rate of 10 per cent, 100 per cent national debt, a contracting economy of around 20 per cent and a ballooning budget deficit of 10 per cent.” But when it comes to the property market, it’s not all doom and gloom, he assures us. “The good news is that there appears to be a disconnect between all these
horrendous fundamentals and the sentiments of home buyers and renters in the marketplace.” User figures from Rightmove corroborate this: the site recorded the 10 busiest days in its 20-year history throughout May and June. On 27 May the property portal recorded more than six million visits (18 per cent more than the same day last year), while users collectively spent over 955,000 hours browsing the site on 6 June. And the financial figures are also positive. Rightmove’s June House Price Index showed that the average asking price of property coming to market was up by an average of 1.9 per cent compared to March, with the number of sales agreed recovering from a 94 per cent drop during lockdown to a daily rate of just three per cent down on a year ago.
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“The latest figures from Rightmove will make uneasy reading for those who have been insistent on talking the market down over the last few months,” says director of Benham and Reeves, Marc von Grundherr. “Of course, it will take some time before we see market health completely return to pre-lockdown levels, but early indicators clearly show a sustained appetite on both the side of buyers and sellers. A huge uplift in stock entering the market and an increase in the average asking price demonstrates that there has been little to no dent in seller confidence. When you couple this with the fact that buyers are now paying a larger percentage of asking price than previously, it’s clear that any suggestion of a market crash couldn’t
