22nd Mar 2017 March Blog: Spring markets on the up?

It’s a welcome relief after the shenanigans of last year to be getting back to some sort of normality. The sales market is holding up nicely and the activity that heralds spring is once more picking up along a more recognisable seasonal time frame. Welcome back, particularly, the first-time buyer – a section of the purchasing public that has been noticeable by their absence in recent times and that in itself is a sign of increased confidence in the sales market.

The market is stable; it’s not going up dramatically and it’s not falling – its steady and I think that in itself is behind this confidence. Buy-to-let investors are (cautiously) also making an appearance. Last year they vanished completely but now the dust has settled and they take stock of their positions they are beginning to look again at their portfolios which is encouraging.

That’s how we see things in central London anyway but more generally in southern England there seems to be similar optimism. One of the more immediate signs of market change can be established in the performance of property auctions and the reports I read show that they are selling upwards of 80% of their lots which is very healthy indeed. One auction, a well-known firm in Cornwall with a substantial catalogue, recently reported 100% lots sold in February which is exceptional.

The rentals market has been dealt a bit of a body blow recently (well at least the landlords have) with increased taxation obligations and additional legal responsibilities and this has led some, particularly those with high mortgages, to decide that the profit margins are not enough to continue. Consequently a small number have decided to cash out. This has not yet affected the state of the market, especially the Pimlico market, to any quantifiable extent as Pimlico has a strong rentals presence in any case but if the supply dwindles to any great degree it will move rents upwards as demand is consistently strong in this part of London. However, the failure of the chancellor to address landlord concerns in the recent budget has done nothing to alleviate market apprehension in the eyes of some commentators and their fear is that this continued penalisation of private landlords will only encourage a further reduction in supply, throwing the market out of equilibrium and hiking rents once more.

Having said that, Pimlico rents remain eminently reasonable compared to their rich neighbours and because of that has always remained popular with renters looking to live in an affordable central London location. It has always produced good yields for investors and we don’t expect that to change much despite the legislative setbacks.

If you want to know what’s going on in the Pimlico/Westminster property market give Nicola (rentals) and Alex (sales) a ring at Dauntons on 020 7834 8000.

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