1st Quarter - Overview of the UK market
UK housing transactions and average prices continue on an upward trend. The Nationwide reported that average prices had risen for the fourteenth consecutive month in February and by 9.4% over the last 12 months, with prices only 3% below peak levels. The HMRC reported a 15% annual increase in transactions in 2013 and the monthly figure for February suggests a 32% increase on the same time last year. This has largely been supported by the Help to Buy initiative, low interest rates, an easing in lending and improving economic conditions. Although the Office for Budget Responsibility has forecast that UK house prices will rise by 8.5% this year and by a further 7.5% in 2015, speculation continues about whether or not there is a housing market bubble.
“We have already been successful in finding purchasers for Pimlico properties from applicants initially considering Belgravia.”
London property market
London as a region continues to monopolise the headlines with some astonishing transactions and double digit growth in many of the boroughs. The prime central markets are still recording positive growth but they have been overtaken by more peripheral areas as buyers search for value.
After a relatively quiet start to the year, activity in our area really picked up at the beginning of March, coinciding with the weather improving.
Prices in our area averaged £2.1 million in the first quarter of 2014, based on Lonres data. However, recent data is indicating prices (based on £ per square foot achieved) have remained static for the first few months of the year, compared with a rise of 6.2% over the last quarter of 2013.
We have seen a rise in the level of supply at the very top end of the market and this is likely to have a dampening effect on prices as buyers have more choice. There are currently 15.7% more properties for sale over £10 million than last year across central London, according to Lonres. Vendors therefore need to ensure they are being realistic with their asking prices to achieve a sale.
The rental market has remained rather static since the end of last year. The appalling weather, more readily available mortgage finance and the uncertainty with regards to what the general election in May next year might hold for bankers and non-domicile residents are likely to be the reasons behind the fall in demand from new applicants in our area. Renewals remain strong and rents are holding up. Indeed, rents have risen by 5.3% in the first quarter of the year in our area.
This once overlooked neighbourhood is at last being recognised for its Thomas Cubitt designed architecture, beautiful garden squares, excellent transport connections and incredibly central location. As values ripple out from core areas of prime central London, Pimlico (SW1V) is becoming an increasingly attractive option for many professionals working in the capital and those seeking a weekly base in London. As a result, Pimlico £ per square foot values are now averaging over £1,100.
Interest is increasing from a number of Belgravia based applicants who are discovering what their budget can achieve in their adjacent neighbourhood.
In 2013, Pimlico offered almost 50% more value than neighbouring Belgravia in terms of average £ per square foot for all property types. However, data for Q1 2014 shows that this gap has narrowed slightly to 42%. Pimlico also provided 14% more value compared to the rest of SW1 in 2013 and looks set to perform well this year.
Properties situated in Eccleston Square and Warwick Square are especially sought after due to their proximity to and similarities with neighbouring Belgravia. In 2013, apartments sold in Eccleston Square averaged £1,170 per square foot, registering growth of 13% since the previous year. A maximum value of £1.9 million was achieved for a two bedroom flat on the square.