PROPERTY
PrimeQResi Journal of Prime Property
Market Comment
primeresi.com
Why Do Animals Herd?
Prime Time Transaction values hit another high note as Notting Hill and Kensington boom: The PCL property market has been generating sales transaction values not seen since 2006, according to estate agency Strutt & Parker. W8 and W11 are at the forefront, recording a 21.8 per cent increase in transaction values compared with 2012. Chelsea, South Kensington and Fulham, meanwhile, saw transaction values jump 14.5 per cent on 2012, whilst overall PCL values saw 13 per cent year-on-year growth. At the very top end, there were 63 recorded sales more than £10 million in 2013 (a 5 per cent increase on 2012). Nearly 44 per cent of Strutt & Parker’s London buyers in 2013 were foreign, which goes some way to explaining all the cash purchases (the agency reports that 67 per cent of its deals were for cash). Chelsea, South Kensington and Fulham seem to be home to the most diverse spectrum of international buyers, while Knightsbridge is still locationof-choice for those from the Middle East. Kensington and Notting Hill’s market is in the process of changing from being domestic-led to being an overseas hotspot. Notting Hill agent Crayson has been reporting similar things, with per square foot prices across Notting Hill, Holland Park and Kensington rising by 9.4 per cent over the last 12 months, and the number of homes changing hands jumping by 42 per cent over the same period. The total value of homes sold last year in the area exceeded £1.8 billion; £662 million more than the total value in 2012, says Crayson.
Winter Market Review Prices and transactions are firmly on the up according to the latest from Lonres, London’s leading real-time property data resource. The firm’s statistics show transaction levels increasing by nearly a third over the last year, with per square foot prices rising, on average, by 13% across the capital. Winter Sales Market Review Summary • 32% more sales were recorded on Lonres in 2013 compared to 2012. • Average prices per square foot across prime London and fringes were 13% higher than at the end of 2012. • The average price paid per square foot in South London was 17% higher in Q4 2013 than in Q4 2012, the highest level of growth across the survey area. • Overall, estate agents expect no impact on pricing levels as a result of next year’s Capital Gains Tax changes, and only slight effects on levels of supply and demand. • The vast majority of agents surveyed expect very little or no impact on their market from the announcement that Funding for Lending will cease to offer incentives for mortgage lending in January 2014. • Three quarters of agents expect growth in prices over the year, with 26% anticipating prices increasing by more than 5%. • Agents are a little less confident about the level of transactions over the year, although just under half of agents still expect more sales in 2014 than in 2013. • Most commentators expect price growth in London in 2014 to be outside the core Prime Central London area. • With its continued investment and development, Lonres expects South London to continue to outperform in both value growth and transactions.
Elena Dimova, managing director of CENTURY 21 Sophia Elena, explores this intriguing behavioural science question
this is a most interesting question in behavioural science. Animals herd to play the percentages. Their instincts tell them that they have a better chance of survival and less chance of being targeted by a predator in a herd than roaming alone. And why do sellers go on the market at the same time? Is their objective to stay on the market and not be picked out or, indeed, the reverse? The principles are very similar. The risks of being selected by a single predator when you are part of a larger group are lower. It is a simple supply and demand game. Sellers who wait to launch their property at the same time as everyone else are not improving their chances of being picked. The demand in the market is fairly evenly spread throughout the year. Since early January, we have been receiving a huge amount of enquiries from buyers who have reassessed their priorities over the holidays, yet stock is low at this time of year. The next big wave is city bonus season and we are in the midst of it now. When the weather starts to improve, more buyers come to market, as they enjoy viewing in spring. You may think there are fewer buyers around during school holidays, but these are likely to coincide with holidays in other countries, and it is a time when overseas buyers come to London looking for an investment property, many of these being ‘cash buyers’. Local buyers want to be settled prior to the new school year; after the summer you have a ‘back to school’ wave of demand, followed by ‘we want to be in our new home for Christmas’ and more overseas buyers. The paradox is that if sellers launch at the same time as everyone else, they are missing a trick. Buyers are there and they want to buy no matter what day or month or season it is. Do the smart thing, take advantage of periods when stock levels are low and have the upper hand in negotiating the best price for your property. CENTURY 21 Sophia Elena, 10 Clarendon Road, W11 3AA 020 7229 1414; century21uk.com
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