When you are a foreign or domestic buyer, looking to buy property in London and the surrounding neighbourhoods, there are some statistics you need to know to help you make an educated decision on whether now is the right time to buy. In this article, I’ll share with you 10 important statistics you need to know from the last year to help you make the right decision.
-9.8% – The decline in the number of UK housing transactions in the year to January 2021 versus the previous year. Given that the property market in the UK, due to lockdown, was shut for the equivalent of 15% of 2020 this goes a long way to explain the decline. While we had a strong second half of the year, 2020 actually started off positively after the general election of December 2019 and low-interest rates.
+5.7% – Average UK house price growth in the year to March, according to Nationwide.
Over the same 12-month period, the FTSE100 fell 1.5% and UK GDP was 7.8% lower in December than a year ago. It underlines how the housing market became detached from the wider economy over the last 12 months.
+4.8% Annual price growth for London for the first three months of 2021. While this was growth, it was down from 6.2% in the final quarter of 2020.
12.7 – The number of new prospective buyers for every new sale instruction in February across the UK. The ratio, which shows the strength of demand versus supply, is the second highest it has been in the last five years and demonstrates why there has been upwards pressure on prices in the early months of this year.
However, we expect supply to rise and the ratio to drop as Covid cases continue to fall, schools remain open, and more sellers believe they will meet the extended stamp duty holiday deadline. The balance should not tip to the extent it puts meaningful downwards pressure on UK prices.
39% – The percentage of London-based buyers searching for a property in the capital in July 2020. The equivalent figure was 70% a year earlier.
The ‘escape to the country’ trend has shaped demand over the last year but has waned to some extent following its high-point last summer.
By February of this year, the same figure had climbed to 49%. Meanwhile, London-based buyers looking in south-west England fell from 16% last summer to 8% last month.
As a general forecast I believe the percentage of London-based buyers looking in the capital should rise further for the rest of the year.
62% – The rise in the number of lettings market valuation appraisals in London and Home Counties in the year to February. It was the highest such rise in ten years. Supply has increased markedly inside the capital over the last 12 months due to more short-let properties coming onto the market.
-14% – decline in rental values in Prime Central London through to February, which was the steepest decline since September 2009. This is probably a result of the increase of supply with more short let properties coming onto the long term market along with the absence of international students, multinational staff, and tourism.
-92% – The fall in the number of passengers coming into Heathrow airport in February this year compared to the same month in 2020.
The impact has been most felt in the Prime Central London property market, with transaction volume down 10% in 2020 versus 2019.
Ironically the price bracket in Prime Central London that has outperformed over the last year is £5 million to £10 million with volumes increasing 7% in this price bracket. One key factor might have been the higher percentage of houses in this price range which has been more in demand as compared to flats.
My forecast: International travel is likely to increase after the summer but there will be continued uncertainty around travel corridors, this may mean an increase in foreign buyers coming to the Capital and investing in properties once again.
24% – The pound strengthened 24% against the dollar between 23rd March 2020 and the last week of February this year, when it rose above $1.40.
As the UK’s vaccine roll-out continues and the prospect of negative interest rates fades, the pound is likely to strengthen further.
In addition, a stamp duty surcharge of 2% for overseas buyers from April will also be factored into negotiations when international buyers return, which may cause an initial softening during a time that foreign buyers will be eager to get back in the market.
0.8% – The UK ten-year bond yield exceeded 0.8% this month. It has risen from 0.2% last summer due to inflation concerns and an expectation the Bank of England will be forced to raise rates.
Despite the increase, a period of prolonged inflation does not appear to be on the horizon.
Rising bond yields makes the cost of financing debt more expensive, especially as the government looks for ways to pay for the pandemic. It’s uncertain whether this will have a direct impact on the property market.
I hope this article has helped you to better understand how the property market has been performing over the last year, and potentially see what the future may hold for the London property market in the months to come. If you’d like help in finding the perfect London property, please get in touch.