Prime London market sees more first time buyers

Taylor Scott International News

More first time buyers are active in the prime London property market with fewer real estate investors in the sector in the first quarter of this year, new research shows. While investors continue to account for the majority of house purchases made across prime London, this margin has narrowed significantly, according to estate agent Marsh & Parsons’ latest London Property Monitor. Some 29% of prime London property purchases were made by an investor in the three months to March 2015, down from 37% at the end of 2014 but first time buyer sales increased from 21% of all purchases in the last quarter of 2014 to 28% in the first quarter of this year. The rise in first-time buyers has caused the number of prime transactions funded by mortgages to jump 17% in the past three months and over the past three months, demand for prime London homes has risen by 20%. As a result, heightened competition for available homes on the market has pushed the ratio of registered buyers per property up from 10 in December 2014 to 12 in March 2014, the data also shows. ‘First time buyers have been riding a wave of fortuitous circumstances recently with almost unheard of mortgage rates, reduced up-front stamp duty costs, and support schemes like the Help to Buy ISA inflating confidence,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but it’s encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city,’ he explained. ‘However, there is, and has always been, some aspirational prime central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns,’ he added. The report reveals that as a result of this strong demand for starter homes, one bedroom properties in prime London have seen the biggest increase in value over the past 12 months with average values up 5%, compared to 1.7% annual growth across the market as a whole. This means the price of a typical one bedroom property in London has risen by £75 a day over the past year. Similarly, one bedroom properties are highly sought after as buy to let investments, with rents appreciating at the fastest rate of all property types across the capital. The average weekly rent for a one bedroom property has risen 5.8% year on year in more affordable outer prime areas of London, popular with young professional renters. ‘With more and more young professionals climbing onto the property ladder, one bedroom properties have outperformed the market across prime London…. Continue reading →

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