London barometer
Sales Director, Douglas & Gordon
At the end of 2014, more offers were agreed than the same time last year despite a 20 per cent reduction in applicants. Pragmatic purchasers seized the opportunity to secure good value for money and, interestingly, fall-throughs were at a 12 month low.
As a direct impact of stamp duty reforms, almost all enquiries received from buyers since the Autumn Statement have been below the £950,000 threshold implying the top end of the market could stay quiet until political uncertainty recedes. For the first time in recent years, the increase in growth of rental values has matched that of sales, reinforcing buy-to-let as a financially viable investment. Nearly double the number of new applicants were registered in December compared to 12 months ago, showing the rental market is very healthy. As we go into an election year, renting rather than buying is probably preferable for a large majority for the time being.
The number of properties we were instructed to re-let was twice as many compared to the same month last year. Significant numbers of landlords were opting to sell up and cash in at a time considered to be the “peak” of the market, whereas landlords are now electing to hold onto their investment properties. We have had six months of consecutive growth in the size of our currently-let property portfolio, which demonstrates that the lettings market grew consistently during the second half of last year, counterbalancing what was happening in sales.
Against this backdrop of a fairly volatile sales market, we believe that the rental market next year will be stable.