London is widely regarded as one of the world’s top destinations, and for good reason. It’s not just the English language or the convenient time zone that sets it apart but its vibrant cultural scene, restaurants and night-life which remain unsurpassed. It is also a leading centre for finance, technology and creativity. Education is another factor in London’s favour. The influx of students from across the globe is an important part of the property calendar and keeps most of our offices, both sales and lettings, very busy throughout the year particularly during the summer months as they get ready for the new academic year.
Since the outcome of the referendum, the lower pound has made the city even more attractive and better value for money for purchasers, especially if you are converting dollars into sterling. As a result, we are dealing with far more Americans than we have done for many years and Middle Eastern buyers who have traditionally favoured London as a city in which to invest are taking advantage of the favourable exchange rates.
This year we have continued our expansion, extending our network into the new ‘up and coming’ areas of London such as Kings Cross, Aldgate and Tower Bridge. These are areas which have undergone significant regeneration on the back of large scale redevelopment schemes transforming the residential and commercial landscape. We are fortunate that being at the forefront of the residential development scene we are able to look further ahead than most and identify growth opportunities. All these offices allow us to combine our skills and reach within both the residential sales and lettings markets and advise overseas landlords on their investment, assisting with furnishing their apartments through Knight Frank Interiors and arranging the best financial package through Knight Frank Finance.
Later this year we will be celebrating the opening of our 30th office in Victoria. This is another area that has seen the benefit of large scale redevelopment by Land Securities. This area, somewhat passed over in favour of its more established neighbours, in the form of Belgravia and Westminster, will soon offer a wide range of properties to choose from, from new fully serviced modern apartments to the more traditional mansion blocks and terraced houses all within a few minutes’ walk of St James’s Park and Victoria station. Apart from the implications of Brexit, this year has seen a market coming to terms with further increases to the levels of stamp duty. There is little doubt that this has caused many contemplating a move to pause and take stock, but it has also given rise to some new trends. One of these is a decision by younger married couples, some yet to start a family, to choose to buy a large family house ahead of the arrival of a growing family to in effect skip a few rungs on the property ladder and therefore save themselves a few hundred thousand in stamp duty. Another trend comes from those making a sideways move out of Prime Central London to a less central postcode. Such a move achieves the happy balance of gaining extra space and a sizeable garden whilst accommodating the needs of the children who do not want to lose touch with their London friends and who favour a walk down the King’s Road rather than a stroll in the countryside.
Cross-Rail, which will open in 2018, has produced price growth in key areas around stations. We anticipate that the next wave of increases will come when the service is up and running and people can see its benefits and marvel at how quickly you will be able to travel across London. It will open up areas and new locations which they might not have considered visiting or living in before. I predict that this year house price growth is likely to remain pretty flat. There is no doubt that demand is definitely out there and it will be stimulated by getting the price right. We are already doing 33% more viewings than at the same time last year, with some canny buyers seeing now as the opportunity to take advantage of price reductions, low interest rates and the on-going allure of a capital city that continues to shine.