In a rather bizarre turnaround, data on the London property market suggests that high-end properties are much in demand. This comes on the back of a crippling lockdown and Brexit negotiations which seem to go from one disaster to another. So, what is prompting this surge in demand for high-end properties in London and will it continue?
London property statistics
Data released by Savills shows that the sale of £1 million plus properties in London is up by 40% compared to June 2019 with £2 million plus sales up 10% compared to the same period. While some of this could be put down to the post lockdown surge are we starting to see a sea change in property investment trend.
Well, if you also look at figures compiled by Knight Frank we see that enquiries for £3 million plus properties in London are up by 53% since the lockdown ended, compared against the five year average. While we would expect data from competing parties to rubberstamp any new trends, it is the strength of the new trends which has caught many by surprise.
Is working from home the future?
There have been rumours, counter rumours and blatantly made up stories regarding a potential change in property investment trends. What does seem to be clear is that the coronavirus pandemic and the chances of this re-occurring in the short, medium and long-term has made many people think again about their property investment strategy. We know that luxury property markets tend to retain their value better than their mass-market counterparts during difficult times. Figures suggest that they also bounce back quicker when the tide does begin to turn. However, there seems to be a real change in investment strategy.
What are the post lockdown drivers?
A number of estate agents have stepped forward with comments and feedback regarding ongoing client enquiries in the luxury property market. Three purchase drivers have been confirmed which include:-
• Properties with large outside space and proximity to car parks
• Properties with large office rooms
• Properties with good strong Wi-Fi
In recent years many experts have been predicting a surge in the number of people working from home and it would appear that the coronavirus has added further impetus to this trend. What we also know is that many businesses will be actively investigating the potential for more employees to work from home in the event of similar outbreaks in the future.
While the UK government stepped in with hundreds of billions of pounds in financial assistance this is not something that can be repeated. It will take many years for businesses and taxpayers to repay these huge subsidies paid out but so far it does seem to have added a degree of relative stability. Yes, GDP growth was down significantly during the lockdown and will take some time to get back to anywhere near normality. However, it would have been much worse if the UK government hadn’t stepped forward with financial assistance.
Summary
It looks as though we are starting to see the emergence of a new trend in the UK property market with particular focus on high-end properties. The coronavirus pandemic has shaken the foundations of the UK business sector and the economy has been hit extremely hard. Hopes for a “V” shaped economic bounceback appear optimistic at best and it will likely be a long hard slog for the UK economy. However, estate agents are reporting “red-hot phones” as the enquiries for large high-end properties continue to flood in.