A sandwich short of a picnic
Rob Clifford is chief executive of Century 21 UK and group commercial director at Shepherd Direct Group
Many capital cities throughout the world often seem like autonomous States in their own right, somehow an integral part of and yet often quite distanced from the country as a whole. London in particular is a city which, for the vast majority of UK residents, will appear like it is on another planet and, for those who don’t live within the Capital, trips there often seem both exciting and bewildering.
These two adjectives would probably also describe most non-Londoners’ view of the housing market that exists there – a view which will become even more entrenched on review of the latest House Price Indices which have revealed some, quite frankly, incredible increases in asking prices over the course of the last six weeks. While the UK as a whole saw average asking prices increase by 2.8%, in London Rightmove’s suggested the figure was a staggering 10.2%. The means the average asking price in the capital is now £544,232 – over £28,000 more than it was just in July – leading Rightmove for one to describe the rise as ‘unsustainable’.
‘Unsustainable’ it is and you would have to be a sandwich short of a picnic, or the most overly optimistic vendor and estate agent, to expect your London property price to keep on increasing by 10% each month. It simply won’t happen however one might be quietly confident of suggesting that demand for London housing is not going to tail off anytime soon – particularly from overseas buyers – and therefore London prices should continue to push upwards perhaps for a little bit longer yet. Good news for many in the industry, including Paul Corcut and his team who run the newest Century 21 office which opened literally around the corner from Buckingham Palace just last month.
Before continuing it might also be worthwhile pointing out the difference between the asking price index and others of its ilk which actually show the price the property was bought for. Putting an asking price into the market and hoping it will be met can be a great deal different to what someone will be willing to pay for a property and what it eventually sells for, so it is important not to hold up this Index as the most comprehensive in the marketplace. However, it does give us all an indication not only of the shifting sands of the London market but also a view on how agents’ see demand for property and their expectations of matching up London’s sellers with London’s purchasers.
There is absolutely no doubting the strength of the London market and this has been growing steadily over the last couple of years. Certainly, London’s property market appears to have shaken off the hangover from the global recession much more quickly than many other locations. However, even while London must be viewed as a distinct entity from the rest of the UK, so must certain areas within the City also be treated differently. The London property market of Kensington and Chelsea is a far cry from that of West Ham and the incredibly buoyed prices of those West London addresses do skew the overall notion of there being a single catch-all London market.
That said, London does represent a vibrant marketplace to operate in; certainly as a franchisor we have seen growing interest in opening in London and have recently opened new branches in areas such as Westminster and Chiswick. The crucial part of operating as an agent in these areas is local knowledge and developing the right relationships that are going to ensure clients remain happy whether they are buying or selling.
Having a global reach is also vitally important from a London market perspective; London is a key hub which means it is hugely attractive to overseas purchasers. As an agency we have recognised this and the recent launch of our global property portal allows all our franchisees in the UK – whether London-based or not – to have their properties listed and be accessible to every single potential purchaser regardless of where they are in the world. To our delight, the site achieved over 53,000 unique visitors in October alone, many of which were viewing our properties for sale across the UK.
London as a city and a property market will continue to bewitch and beguile. The ‘boom’ word is often used with regards to it and there’s no doubting its current upward trajectory but also the huge influence it has on the rest of the country. We need London to continue being an economic powerhouse but also ensure it meets the needs of all who live and work there. Being able to understand the regional aspect of London is crucial to being a success there and it is certainly our intention to grow a strong and sustainable presence across the Capital and beyond. I suspect many others will be looking to do the same in the months and years ahead.