September Comment - London Property Sales and Lettings Market

Uncertainties are in, certainties are out! Who would have said in August that Lehman Brothers would no longer be with us, or indeed that HBOS would have to be rescued? But where does that leave the property market in this area?

On the sales side of things, uncertainty will certainly continue. Volume is certainly down and there is more than one reason for this. One is people having difficulties getting a mortgage, a situation that will only recover when there is confidence in the banking market and banks start lending to banks again. Lehman's, HBOS and all don't help on that front and the situation could get worse before it gets better. Falling prices are also a certainty, but how far and for how long is anyone's guess. Well presented property in a good location is still getting lots of attention. The puchasor thinks he or she may get a better price if they wait a few more months, the vendor believes that his asking price is reasonable and, of course, that's what his Estate Agent told him it was worth! Reality needs to set in!

Government regulation does not help and HIPS certainly don't. Rarely are they looked at by potential purchasors (we have been asked by three to date) and in my experience they have never either guaranteed a transaction or even speeded the process up. An unnecessary expense if there ever was one.

Chard is, of course, renowned as a leading London Letting Agent. On that side of things the news is not too bad, although some talk in the press about a boom in the London lettings market is, in my view, a bit less than certain. What is for sure is that there is a lot of property on the market, our instruction levels of flats and houses to let in London have more than doubled over the past year and another certainty is that tenants know it. The predicted boom in London rental values is, or at least has been to date, less than certain and will, in my view remain so. Many tenants renting property in central London work for banks and financial services companies in the City, how many will leave either London or indeed these shores is not yet clear, but there will undoubtedly be some. Many tenants are chosing not to move and renewing their contracts, often this may be due to uncertainty about their own futures.

Again our beloved Government has stepped in with a mini-HIP, otherwise known as an EPC which will be obligatory on all property let out from the 1st. October. This will tell you how energy efficient your Victorian conversion is, sash windows and all, but, of course, you can't change them as you live in a conservation area! I am all in favour of new homes being built using the most efficient technologies, but this is London and most of our buildings are around 100 years old!

My view is that the only certainty is uncertainty for a few months to come.

Andrew Chard
Chard Sales and Lettings