Sales Commentary
The momentum in the Sales market continues: Viewing numbers are up 191% vs August 2016 and 214% for the period September – October 2016 vs the same period last year. There is a floor to the market in PCL which is being set by the vendors where they will accept an average 7% discount on updated offer prices (so approx. 10% below asking prices from the beginning of 2016), as most do not need to sell and are therefore sticking to their prices. This underlying strength has given confidence to buyers, particularly those buying with USD, that the London market continues to be a good long-term investment. The family house market had been slow over the summer is now picking up demand and we have seen a resurgence of enquiry from the Euro Zone, the Middle East, Turkey and, for the first time in a while, the US market.
Vendors must however still appreciate that this is a buyers’ market. 84% of the properties on the market in Chelsea have been there for over 3 months and those which are selling are doing so up to 10% off the asking price (with the majority at 5-7%). It is important to remember that of the properties available in Chelsea, only 6% are under offer so choosing the right agent and having realistic expectations is key.
Lettings Commentary.
Whilst we saw rental stock levels drop off last month, they remain historically high. This has led to a reduction across Prime Central London of 4.7% in achieved rents with larger falls in Chelsea and South Kensington (nearer 6%). We have however seen a large increase in transaction volumes suggesting this new price level is finding some traction with Tenants.
We have transacted 25% more properties in the 3 months to end October 2016 and we did in the same period last year. As we mentioned last month, we had a late surge in foreign students which brought the average rental we transacted in September to £2,600 per calendar month. For October, we have seen more professional tenants (we highlighted our expectations in last month’s commentary) and our average rent was £4,836 pcm. In terms of demographics, our tenants came from the Eurozone, the USA and the Middle East but we also our domestic applicants performed well. Our increased performance over the last quarter has led to a reduction in our stock levels and we are looking for more properties to meet the demand we are generating – please call Peter Hermon Taylor if you have property which is on the market but not currently let – we may well have the right tenant for you.