The London Barometer June 2010
Thursday, July 01, 2010 by Douglas And Gordon
Sales: June 2010
"Who would have thought, six months into this election year and the London property market is in a relative state of utopia. Supply has been increasing steadily since January to levels more than 50% higher than the lowest level in the last twelve months, and demand has remained consistent to the point where we are now operating at almost three buyers for every one property. A surprising result, especially since everyone thought the election and emergency budget would slow the market. Although transaction volumes are still 22% lower than the peak of 2007, prices for the best properties across our network of offices are reaching the same highs."
"It shows the resilience of the London property market which can be partly attributed to foreign buyers in central London. Some feared the fall of the euro would affect the market, but the first thing we saw the Greeks, Spanish and Italians do was invest in London property. We've even seen a surprising number of Americans buying in Battersea to be near the US Embassy which is still ten years away."
The Douglas & Gordon Average London Sales Price Index for Q2 2010 shows an average annual increase of 16%, with the biggest increase of 25% for three bedroom houses
Lettings: June 2010
"Many property owners in central London are foreigners who have fallen prey to the accidental landlord syndrome due to changes in currency, proposed reviews of non dom taxation and increased Capital Gains Tax. This is evidenced by the 50% increase in rental stock in our Chelsea office in the last two months alone."
"Despite the increase in supply, there are still five people fighting for every one property available to rent in London. We have reached a tipping point where tenants are no longer in a position to negotiate down on rent - the average rental increase in June was 5.25%, however some of the larger properties in central London which had significant falls in rent last year increased by between 15% and 20% this month."
The Douglas & Gordon Average London Rent Index for Q2 2010 shows an average annual increase of 24%, with the biggest increase of 38% for four bedroom houses.