Foxtons news
Records set as huge property demand rolls into 2007 Record prices - record rates of increase - record borrowings and driving it all, a record number of people wanting to buy.
31st January 2007
Across London, and at all price levels, the housing market is responding to a line up of positive factors. Unemployment is low, the economy feels sound, the financial sector - the engine of the London economy - is booming and there's a lack of new build. People believe house prices are going to rise further and the city bonuses are fuelling the increases. The only shadow on the horizon is interest rate increases and even there the current rate is reasonable by historical standards.
Record number of buyers
Buyers are registering with Foxtons in record numbers. In January we typically see a surge in buyer interest but 2007 is well ahead of recent years. We are seeing three times as many buyers for every property we have on sale compared with our previous record year: 2006.
This surge in demand is spread equally across all prices ranges and sizes of property. And this has happened despite the fact that we have plenty of properties on offer (an average of 200 for sale per office) with a very healthy level of new properties being listed in January itself. As we move further into 2007 this huge wave of demand will put further pressure on property prices, on top of the record increases of last year which topped 25% in many areas.
As we move further into 2007 this huge wave of demand will put further pressure on prices, on top of the record increases of last year which topped 25% in many areas.
Property selling faster and higher
This level of demand has also created a much more competitive market in which the actual sale price is much closer to the initial asking price and properties are selling more quickly. By the end of 2006 properties were selling about twice as quickly as they had at the beginning of the year. And, over those 12 months the normal gap between the initial asking price and the eventual sale price almost disappeared as competition drove buyers to make better offers.
Source: Data stored on Foxtons Business Operating System, January 2007
What should you do?
As a seller:
Take advantage of the market.
The current level of competition in the market place means that sales are being achieved more quickly at good prices.
Contact your local office for information about selling property in this market or to gauge the current value of your home.
As a buyer:
Be prepared and be decisive.
Don't miss opportunities because you're not prepared for the speed of the market or the level of offer required to secure your chosen property.
Register online and we will contact when the latest properties come to market.
The future?
Property prices are responding to London's increasing strength as a global centre for service industries, particularly in the financial sector. This has happened because of the skills available, our ability to do business with Asia in the morning and the Americas in the afternoon, a benign tax regime and strong stable institutions. None of this looks likely to change. Nor does our limited ability to build new homes. There may be ups and downs with economic cycles but fundamentally the imbalance between supply and demand looks likely to continue.
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