Confidence is showing signs of returning across London’s residential property market, with buyer and tenant enquiries rising alongside an increase in homes coming to both the sales and rental markets.
Chestertons says buyer enquiries through its sales portal recorded their strongest performance in 10 months during August, while vendor instructions increased 14% year-on-year ahead of the autumn selling season.
The recovery is also evident in the rental market, where prospective tenant enquiries increased 13% year-on-year during August and new landlord instructions rose by around 6%.
The figures suggest activity is strengthening on both sides of London’s housing market following a challenging period for sales and the introduction of the Renters’ Rights Act on 1 May.
SALES MARKET IMPROVES
Third-party data from TwentyEA suggests Chestertons also increased its share of the sales market during August.
New instructions to the agency increased 63.9% year-on-year across the postcodes in which it operates, compared with a 9% decline across the wider market.
Over the past 12 months, instructions across those postcodes increased by 3.5% overall, while Chestertons recorded growth of 11.4%.
The agency also saw sales agreed increase 7.8% month-on-month in August, against an 18.1% decline across its target postcodes.
Chestertons believes improving economic sentiment and greater political certainty are helping confidence return ahead of the autumn market.
TAX RUMOURS
Adam Jennings (main picture, inset), Head of Residential at Chestertons, says: “Months of rumours about potential tax changes, many of them related to property, impacted activity levels in the housing market last year, particularly in the capital.
“After a challenging few months in London’s property market, greater clarity around the economic outlook is helping to support confidence among buyers and sellers.
“Combined with improving consumer sentiment and the renewed activity we are seeing across our London network, there are reasons to be optimistic about the market’s trajectory in the months ahead.”
TENANT DEMAND RETURNS
Activity has also picked up in London’s rental market following a more subdued July.
Chestertons says tenant enquiries had fallen year-on-year during each of the five months before the Renters’ Rights Act took effect, before increasing 17% in May and 10% in June.
Enquiries dropped 7% year-on-year in July before rebounding by 13% in August.
At the same time, new landlord instructions increased by around 6%, suggesting more rental properties are returning to the market as landlords adapt to the new regulatory environment.
MORE CHOICE FOR TENANTS
Katinka Hill, Head of Lettings at Chestertons, says: “As the report states, August brought an increase in activity across London’s rental market, which doesn’t surprise me and is in line with usual seasonal trends.
“We also expect this momentum to continue into September now that schools have returned and people are back from holiday.
“Achieved rental prices are holding firm, which is a positive sign. A notable trend we’ve seen since the Renters’ Rights Act took effect on 1 May is that tenants are taking longer to make decisions, weighing up their options more carefully.
“This is because they have increased flexibility to move, and there are plenty of quality homes to choose from.’’
