Prime Central London PCL vs Prime South West London PSW
Friday, October 04, 2013 by Ed Mead
Prime Central London vs Prime South West London
We appear to be entering a new era. Anyone worth their salt could have predicted that the arrival of the US Embassy and Battersea Power Station were clearly schoolboy pointers to enhanced values but 30% in 9 months?
To some extent PSW has been helped by a market serviced by people who actually need to buy and sell. PCL on the other hand is now suffering more than ever from what’s often been its saviour, discretionary buyers and sellers. In PCL you can add various external factors; nowhere sensible or safe to put your capital, zero returns and income on capital, twice as many agents chasing half the stock, press and agents constantly inflating sellers expectations, and it’s not difficult to surmise that if you own a property why would you want to sell it. Rental yields have plummeted and so the search is on for better yields allied to an area that actually has some further capital growth potential. PSW would seem to satisfy both.
New waves of foreigners arriving have found themselves priced out of PCL and are now bolstering demand in PSW and this trend looks set to continue. What’s not to like about living next to all the wonderful green spaces in Clapham Wandsworth and Battersea.
Evidence in PCL is that infighting amongst agents has pushed asking prices about 10% over where buyers will actually put their hands in their pockets. Part of this is easy to see and difficult to correct. There’s a lazy culture developing that seems to have a simple, but obviously flawed, corollary at its heart. Just because one property sells in a street at one price all others will sell for that price. Laziness amongst the new breed of brash agent simply multiplies this “new” £/sq ft figure by the size of what they’re looking at and funnily enough they won’t sell. A good example was a fabulous smallish two bed flat sold earlier this year in Draycott Place. It sold for over £2200/sq ft. Since then there’s been a rash of flats coming on at similar relative prices but guess what, they’re not selling because they’re not the same flat. Never has a well-trained seat of the pants been as necessary as it is now.
The seat of the pants I’m sitting on tells me asking prices need to come down 10% before PCL will start to move again and with the percentage of discretionary sellers out there that doesn’t look as if it’s about to happen anytime soon. So if you want a moving market, have a good look at PSW.