North London property market predictions for 2011
Wednesday, 30 March 2011 12:46 PM
Spring property market activity is often used as an indicator for the rest of the year. Based on the past three months, what predictions can be made for the 2011 North London property market?
When it comes to North London, property portal FabricProperty.com is the site in the know, as it's owned and populated by more than 30 estate agents catering for the area's high-end market. In this feature, experts from its member agencies share their views on what will happen in the year ahead.
Investment in prime London property
Agents believe that, despite the gloomy economic outlook, UK investors will return to the market due to the shortage of stock available. In fact, Trevor Abrahmsohn, managing director of Glentree International, predicts that London prices will rise by about five per cent.
"It looks like interest rates will remain within half a per cent of present levels until the end of the year. New developments are few and far between because obtaining funding for them is still very difficult, and the planning process is still as strangulated as ever," says Abrahmsohn.
"Buy-to-let investors are choosing residential investment over pensions and, at the same time, rents are rising by at least ten per cent in London. There are fewer and fewer properties available in any price range and that is having an upward effect on prices.
"There is still time to lock in a long-term fixed-rate mortgage and although interest rates will undoubtedly rise over the next few years, if you are in secured employment, there is no better time to invest in your own property and build up a tax-free asset that one day could be your pension."
Marylebone: the hottest property tip in London?
Central London boasts many prime residential addresses but Marylebone has taken a long time to join the hallowed ranks of Kensington, Holland Park, Notting Hill and Chelsea when it comes to property.
However, this is quickly changing. Graham Harris, director at Harris Latner, says: "More and more buyers and renters are finding their way to [Marylebone] and the result is a fast-depleting stock availability of all shapes and sizes.
"If this continues at the same pace, we predict a rise in Marylebone property values of between three and five per cent this spring alone – and the increase could be much greater for certain types of property."
But where is the demand coming from? Harris says, "Demand is being generated from the UK and abroad. In particular we are recording an unusually high number of overseas enquiries from investors looking to secure a central London base for use in the future by themselves or their children that can be let in the meanwhile.
"Typical Marylebone residential rental yields are currently running at between four and five per cent gross. The rental market in Marylebone is very strong at all levels and in many respects it could be argued that the demand from renters is even higher than from buyers."
Popular property types
In terms of what buyers are looking for this spring, it seems that popular mansion blocks and period conversions are ticking the right boxes, especially if they have access to a garden.
Tony Gambrill, area director at Chesterton Humberts, says: "Many of the most desirable properties in Little Venice and Maida Vale are period conversions and mansion blocks, often with communal gardens.
"Although many conversions will have their own gardens, buyers are also attracted to properties that have communal gardens because they offer green views and tend not to be overlooked, offering more privacy.
"In a typical mansion block, where there are five or six flats per property, it is the property with direct access to the garden that is the most desired."
Overseas investors
According to many agents, the ‘safe’ market of London is a magnet for overseas buyers who will look to make considerable investments this spring. Mark Pollack, director at Aston Chase, says: "London continues to be a mandatory location for the 'super rich', partly due to its reputation as a global financial hub.
"This is likely to be further compounded by recent events in the Middle East, which will inevitably result in an increased demand for homes in cosmopolitan, 'safe and stable' locations such as London.
"The city boasts a plethora of outstanding schools and universities, which act as a magnet to wealthy overseas investors, many of whom purchase apartments in London for offspring to reside in whilst studying in the capital."
Area-wise, Pollack says, "With the bonus season upon us, St John's Wood represents a perfect location for Canary Wharf-based buyers due to the fast Jubilee line underground link, not to mention the ASL (American School in London) and the presence of the American Ambassador's residence in Regent's Park, which is surrounded by the largest outdoor sports area in London.
"Sectors of the Middle Eastern and South-East Asian communities have also, for many years, been attracted to the area by the presence of the Regent's Park Mosque, which is also known as the Islamic Cultural Centre in London.
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