If you’re planning on buying, selling, letting or renting a Central London property this year, then you’re probably wondering what the next 12 months will hold.
Property expert Kay & Co has taken a retrospective look at 2015 to see how the past property climate will influence 2016.
Central London property - review of 2015
There was a pause in the action during the first quarter of 2015, when the world’s property elite and Central London estate agents held their breath for the general election. Concerns that a ‘mansion tax’ combined with new stamp duty reforms would impact sales at the top end of the prime Central London property market were alleviated as the tax never materialized. The stamp duty overhaul, however, took a little heat out of the £1 million+ property market.
Following the election, the summer months of 2015 saw the London property market below £1.5 million really gather pace - it was by far the most active sector of the market. At the same time some price corrections throughout the £2 million plus sector were deemed beneficial, creating stability. The £5 million plus end of the market plateaued due, in part, to purchasers waiting longer to buy the exact property they required and substantially higher stamp duty bills.
2016: looking forward
House prices and rental values
While housing has climbed the Government’s policy agenda, with supply issues dominating the private housing market, it is likely that house prices and rents will increase this year. The RICS has predicted that house prices are expected to see an average increase of 6% over the course of 2016. Activity is forecast to peak before April 2016, when the new buy-to-let stamp duty levy kicks in.
If you’re looking to secure a new home or property to rent in Central London, a report by ARLA and NAEA might also speed up your decision-making process. The organizations predict that by 2025, house prices in the UK will soar by 50%, and rental values will also climb by over a quarter!
With the US recently raising interest rates for the first time in almost a decade, people are cautious as to when this will happen in the UK. There are mixed thoughts, with some economists not expecting a move here until late 2016 or not even until 2017. Howard Archer, chief economist at IHS Global Insight, comments: “The Bank of England is more likely than not to raise interest rates by mid-2016 - we expect a move in May.” This sentiment – although not shared by everyone - is expected to push sales during the first quarter of 2016.
Where is hot property in Central London
It’s an exciting time to live in Central London, with emerging areas of the city coming to the fore. One of the neighbourhoods we expect to see mature is King’s Cross. King’s Cross Central Limited Partnership will provide good estate planning with the right balance of offices, residential and a good mixture of tenants in the retail spaces. Global businesses, such as Google, moving into the area will bring more footfall and significant consumer spending power. The subsequent need for housing will be met by landmark schemes and new residential buildings, such as the Gasholders Apartments and The Plimsoll Building.
Who will be buying in 2016?
We expect to see the sub-£1.5 million market continuing to be the busiest sector, especially among domestic buyers. There is still demand for super-prime homes; we have already had several genuine enquiries from Middle Eastern and Chinese families seeking £50 million plus homes on the edges of Hyde Park, Mayfair and in Regent’s Park. Given recent enquiries, we are of the opinion that South American and Indian buyers will come to the forefront of the super-prime market and keep prices buoyant.
At Kay & Co we have extensive local knowledge about Central London and hold a substantial portfolio of properties for sale in Bayswater, Hyde Park, Marylebone, Paddington, Regent’s Park and Fitzrovia. If you would like any further information please browse our website www.kayandco.com or visit us in person at our Kay & Co office Hyde Park or in the Marylebone office