Sustained domestic and overseas demand for property in Prime Central London has caused a further 25% drop in stock levels at the start of this year, reports property consultants Cluttons.
This is resulting in extraordinary levels of competition between buyers for the limited property for sale, while demand remains close to record high levels.
Particular hotspots, such as Chelsea and South Kensington, have seen such strong demand from buyers that deals are being agreed within hours of a property coming onto the market, often after just one viewing.
Furthermore, homebuyers, frustrated by a lack of options, are agreeing to pay a premium above the asking price in order to secure a home on a specific road. Two flats Cluttons recently sold on South Kensington’s Onslow Square went to sealed bids, resulting in deals being agreed in excess of £100,000 above the asking price. This demonstrates the underlying confidence in the London market, reflecting buyer belief that values will continue to appreciate.
Charlie Noel-Buxton, Partner for Residential Sales, said: “House hunters in Prime Central London, starved of options, are going to great lengths to secure a property when it comes onto the market, particularly those on the most desirable roads.
“We believe registered demand underestimates the underlying level, with new instructions attracting a rush of applicants who aren’t registering with agents until they see a property they like. It’s a seller’s market, and those who need to sell this year can expect to benefit from a lack of competition from other sellers, combined with near record levels of buyer interest.”
Richard Gordon of UKPI commented: “The London market is often seen as being disconnected to the rest of the country. However, what happens in London generally happens elsewhere soon afterwards. Where London lead’s – other areas follow. This is true in both falling as well as rising markets.
“It is very clear there is huge demand for London property at present and this will start to filter out to other areas over the coming months, if it hasn’t already. I firmly believe the UK property market has turned a corner, particularly in the good quality, affluent areas where demand is high and buyers have the financial ability to pay the prices being asked.”