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First Time Buyers Rushing to the Prime London Market
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The number of first time buyers is almost even with the amount of investors in the prime London property market, found estate agent Marsh & Parsons.
Investors are still making the most home purchases in prime London, but the gap has closed in after first time buyers rushed into the market in the last three months.
Marsh & Parsons’ London Property Monitor found that around one in three (29%) of prime London property sales were made by investors in the three months to March 2015. This fell from 37% at the end of 2014.
In the same period, the number of first time buyer sales rose from only 21% in the last quarter (Q4) of 2014, to 28% in Q1 2015. This increase has boosted the total number of sales in the prime market funded by mortgages to 17% in the last three months.
First Time Buyers Rushing to the Prime London Market
In Q1 2015, demand for prime London homes grew by 20%. This has caused added competition for available properties on the market and increased the amount of registered buyers per home from ten in December 2014 to 12 in March 2015.
CEO of Marsh & Parsons, Peter Rollings, says: “First time buyers have been riding a wave of fortuitous circumstances recently, with almost unheard of mortgage rates, reduced up front Stamp Duty costs and support schemes like the Help to Buy Isa inflating confidence.
“Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but it’s encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city.
“However there is, and has always been, some aspirational prime central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns.”
One-bedroom properties
Due to the high demand for starter homes, one-bedroom properties in prime London have experienced the largest increase in value in the last year, with the average price up 5% compared with the 1.7% annual growth in the whole market.
The price of the average one-bedroom home in London has increased by £75 a day in the last 12 months.
Likewise, buy-to-let investors favour one-bedroom properties, as rents on these homes have risen at the fastest rate of all house types. The average weekly rent on a one-bedroom property has increased 5.8% year-on-year in the cheaper parts of outer prime London. Young professionals are particularly keen on renting these homes.
Rollings adds: “With more and more young professionals climbing onto the property ladder, one-bedroom properties have outperformed the market across prime London.
“Historically, buyers rated property on the number of bedrooms and a check list of desirable features. But the speed at which the London property market has moved in recent years has shifted the goalposts.
“Today’s Londoners are far more likely to prioritise location, overall square footage and well-thought through living space, compromising on that second bedroom accordingly. For the same reason, savvy investors who find the right one-bedroom property have the golden ticket to rental returns.”1
