Newsletter December 09

Introduction by William Carrington

Website design and hosting

A walk through by Keith Rigby

Statistics by Harriet Black

Market predictions lonres.com | Newsletter | December 2009

Introduction by William Carrington

As the year draws to a festive end, I am compelled to comment upon what has been a remarkable year for the central London property market. At the beginning of the year, there was a great deal of uncertainty as to the direction it would follow, and we now know that its rise has been relentless. Prices appear to have reached the levels of the first half of 2007, but stock levels are worryingly low. We are listing less than half of that at the same period last year.

The main difference must be interest rates. Base rate trackers and fixed rates of 1.99% as opposed to 5.39% two year ago have been a major contributory factor in the latest mini boom, which must be unsustainable. Do those buyers have a get- out plan, and does that mean we will have replacement stock in a couple of year’s time? What is certain, is that global and economic events of this year have not impacted upon the needs of property buyer.

Many people have commented that it will be the election next year that will change things for us. Why should it? More of the same from a tired incumbent government, or more of the same from the Conservatives? Will it be climate change? Only as part of a range of increased taxation measures. Two things will affect the buyer next year: the downward reassessment of UKPLC’s credit status will have a profound effect on our ability to repay our borrowings; so interest rates will begin their upward creep, and the second item will be the inevitable tax rises that will begin to bite in the second half of next year. It is my belief that these two issues will affect our market in the next 12 months. The “when” is where the money is made!

Anyway, it’s Christmas time and we should celebrate that and the resilience and professionalism of you, our subscriber’s. Happy Christmas to you all.

Did you know...?

Lonres can accept automatic feeds from any CRM System saving you time. We already accept feeds from Reapit, Aspasia, CML to name a few. To get set up please call Stephen on 020 7924 6622.

1 lonres.com | Newsletter | December 2009

Website Design and Hosting

“Lonres were very helpful, understood what we needed, came up with an attractive design and it seems to be working very well for us”.

“Lonres has become an invaluable, indeed indispensable aid to the modern London agent. Our website as designedJames andTaylor Edward Simpson constructed by that fi rm, has been widely praised by clients, applicants and colleagues alike”.

“Couldn’t ask for more, good communication and a great fi nal result” “I just wanted to say that I am really grateful to you both for putting Nicholas Boden the website together. Your team have been really great and totally professional throughout the process”. Gary Latner

Lonres Building, Designing and Hosting agent websites

Contact Anthony on 020 7924 6622 if you are considering upgrading your website in 2010

2 lonres.com | Newsletter | December 2009

A walk through London by Keith Rigby

Live local, work local, love local: North has not always been as popular as it is today, over the past few decades much of the area fell into disrepair At Bective Leslie Marsh the vast majority of the staff in the with the crime rate rising and the property prices slumping branch, including myself, work within a dramatically. It was not until the mid nineties that the area was stones throw of the office on . Over the years rejuvenated and a new influx of buyers came to North Kensington, I have lived here I have been immersed in the areas colourful, raising the profile and desirability of the area. community life, worked in the heart of North Kensington and brought a family up here. It has been extremely interesting to Conserving the Capital: see first hand over the past twenty years how dramatically the A large section of North Kensington is made up by the St Quintin area has progressed. Estate Conservation area. On the 24th February 1974 Since moving to North Kensington I have seen a vast improvement in a number of sectors. The crime rate has dropped considerably and various areas which once were renowned for being dangerous have been regenerated. These changes have made way for the introduction of trendy, independent boutiques and shops, along with popular gastro pubs and quaint coffee shops. The area has become extremely family orientated with excellent schools and opportunities for children in terms of extra curricular activities. These include the local under 18’s football team The Kensington Dragons who are sponsored by Bective Leslie Marsh.

The area has gone from strength to strength with a the Kensington and Chelsea council received an application from regeneration program put in place to restore many of the the estates residents association requesting that the area be buildings to their former glory after a number of years of deemed a designated conservation area. The request was initially neglect. put forward to protect the site from the potentially harmful influences of the Channel Tunnel terminal which, at that time, was planned for White City.

One of London’s most famous markets, adds to the popularity of the area attracting both locals and tourists every Friday and Saturday. It has retained much of its authenticity and there are a number of beautiful antique and jewellery stalls which have been handed down through generations. The Property Scene:

Things have certainly changed dramatically in the past few decades in North Kensington and this is reflected in the property prices. During the mid nineties £350,000 would have bought you a four bedroom house where as today we are selling similar History: property for £1.1 million.

Prior to the early 1790’s the majority of North Kensington There is an eclectic cross section of residents in North was made up of two adjoining farms- Portobello Farm and Kensington which adds to the unique personality of the area; Notting Barns, the latter of which belonged to Thomas Darby from the bohemian crowd to high net worth, high of Sunbury and was the earliest record of occupation on the powered, well heeled bankers and lawyers. The area has been site. The first major residential building work commenced home to various celebrities including Dusty Springfield, Sophie between 1860 and 1879 when the foundations for Cambridge Ellis Bextor, Rik Mayal, Jason Donovan and David Cameron. This, Gardens, Gardens and Bassett Road were laid. The along with the rising property prices and the increasing number first houses to be built on the estate were 60- 68 Cambridge of commercial businesses, including Stella McCartney, Designers Gardens which are three stories in height with centrally placed Guild and Sigerson Morrison have been established in the area, doorways flanked by columns and bay windows. In 1862 highlights the ever growing popularity of W10. Charles Henry Blake acquired 130 acres of land adjoining the Keith Rigby, Director. estate and more building took place, thus expanding the built 126 Ladbroke Grove, London, W10 5NE. up area. [email protected]. 020 7221 0330

3 lonres.com | Newsletter | December 2009

Sales

An overview of London’s housing market by Harriet Black

Polarised housing market growth in first 3 quarters of 2009 Average values of properties sold across London

2007 2008 2009

£5,000,000

£4,000,000

£3,000,000

£2,000,000

£1,000,000

£0 123456789 Source : Nationwide Source : Lonres Source: LonRes Change in new instructions across London Change in supply in different locations across London

Q408 Q109 Q209 Q309

1200 400

1000 300 800

600 200

400

100 200

0 Feb- May- Aug- Nov- Feb- May- Aug- Nov- Feb- May- Aug- Nov- 0 07 07 07 07 08 08 08 08 09 09 09 09 123456789 Source : Lonres Source : Lonres

Given the scale of economic events at the end of 2008, few would Supply has been one of the key drivers of 2009 with the have predicted that just over a year on the UK residential market lack of new instructions providing a degree of support to the would be showing genuine signs of the beginning of a recovery. housing market.

Whilst technically we remain in recession, the prospects of a In its latest housing market survey, the RICS reported a small global depression have all but disappeared and the low interest increase in new instructions in recent months. Looking at rate environment has improved many households’ affordability. LonRes statistics, supply across London peaked mid-2008 before falling consistently over several months. There has Housing market data released over the last few months has been been a small amount of recovery recently but new instructions overwhelmingly positive. At the end of the third quarter, average are still well below the monthly average seen in 2008. values in the UK as a whole had risen 1.3% while in London growth stood at 3%. Although there was initially concern that the In London there is still a significant mismatch in supply market in London and the South East would be hit hardest given and demand. One result of this mismatch is the level of the exposure to the financial sector, these areas have been the competition for properties and many agents in our monthly first to stage a recovery with cash rich individuals and investors survey have reported an increase in multiple bids. leading the way.

Area definitions: 1. , , Mayfair, 2. S Kensington, W Chelsea, 3. Chelsea, 4. Kensington, , Notting Hill, 5. Marylebone & Medical Territory, , 6. Pimlico, Victoria & Westminister, 7. Hampstead, Regents Park, St Johns Wood, 8. Earls Court, 9. South of the River

4 lonres.com | Newsletter | December 2009

Sales

Residential property transactions levels have increased Proportion of lots sold at auction in latest quarter

Source : HM Revenue and Customs Source : EIG

Confidence in the housing market has improved in recent As a result the prime housing market in London has months and as a result transaction levels have started seen strong demand and consequently the market has to recover. In the three months to October, the number of outperformed other parts of the UK. residential transactions increased by 22.1% on a year earlier. Despite a recovery in mortgage approval levels, the mortgage This investment buying theme was reflected in our agent market continues to be restricted. Even with the consistent survey where around 80% of respondents cited investment increase in approvals, current levels are still barely over half of as one of the key buyer motives. the long-run average. Auctions can be an interesting housing market indicator. Much of the demand for housing has come from cash rich Recent data from auctions further highlights this individuals. Many people have favoured residential property investment motive. In a survey of buyers at Allsop’s as an investment over the last year as most alternative residential auctions this year, 93% of purchasers were investment opportunities have not been that attractive. For private investors. foreign investors the weak currency provided further incentive. Data from EIG (Essential Information Group) on auctions shows that the take-up rate at auctions has increased this year (up 16% over the last year) with especially strong demand seen in London.

Sentiment towards the residential market certainly seems to have improved. Indeed, according to our agent survey, Investment motive for there was a distinct improvement in sentiment in the last property few months of the year. We would, however, still recommend a degree of caution looking ahead into 2010. There is still some uncertainty Demand for residential property over the length of time it will take for the economy to recover. We do not believe that property values will, in the in recent months has been led by near future, improve at anything other than a steady rate. investors. This has been partly due to limited alternative investment opportunities. For foreign investors, the weak currency has provided further incentive.

5 lonres.com | Newsletter | December 2009

Sales

Your Market Predictions for Sales 2010

“As onerous tax rises kick in and demand from cash rich buyers runs out the ‘recovery’ is likely to stall in 2010. Nonetheless, with poor investment returns elsewhere the central London property market is likely to be supported by continued demand from overseas buyers although we anticipate very little growth if any and in certain instances, prices could drop by up to 5%”.

Mark Pollack Aston Chase “2010 West End Central: Popularity in the Fitzrovia/ Bloomsbury borders gets “Steady improvement should NW3 stronger and stronger no continue due to the shortage of good downturn envisaged” properties. We see competitive bidding resulting Laurence Glynne in more sales being agreed and LDG even some sealed bids”. NW8 NW1 Rosy Khalastchy Beauchamp Estates EC1 W9 WC1 EC2

EC4 EC3 W1 WC2 W2 W11 “With correct pricing, new instrucions are moving fast, SE1 which should continue if we, as W14 W8 SW7 agents, don’t overprice to acquire SW1 instrucions”. SW5 SE1 “If Battersea Power station gets the SW3 planning permission and building Jane Kempsey SW work commences then SW8 may Wedgwood Estates 10 finally become a postcode that SW8 means something to the masses and SW6 will hopefully attract the premium it deserves!”. SW11 Charlie Garton-Jones Garton Jones Real Estate SW15 SW18

“Whilst many of our competitors “We are expecting 2010 to be steady, believe the market may yet dip but unfortunately nothing too exciting. some more in 2010, (figures of The combination of higher taxes, course differ, but 5-10% seems general election, and the slow grind to be the consensus) We actually out of recession, will probably produce believe that prices will remain a satisfactory but not spectacular stable and any increase in stock market.” levels will not have an adverse “Continuing low stock levels forcing prices affect and 2010 will not differ to ever higher unsustainable levels. Mr Seamus Wylie markedly from the last of 2009.” Brown’s rank economic incompetence Ayrton Wylie has left Britain with the worst deficit of any David Cleary major developed country and pay back time Winkworth & Co is just round the corner!”

Richard à Brassard Courtenay

6 lonres.com | Newsletter | December 2009

Lettings

Change in new instructions across London Average rental values

2007 2008 2009

£1,500

£1,200

£900

£600

£300

£0 123456789

Source : Lonres Source: LonRes Source : Lonres

Within the rental market, there has been a different The increase in supply has started to ease over the set of demand / supply dynamics to the sales market. last few months with the level of new instructions falling As the supply of property for sale declined, the number consistently. At the same time, demand has started to of properties available to let increased with ‘accidental increase. This pattern of demand and supply has helped to landlords’ emerging as people decided to let out their stabilise rental values. (a trend also highlighted in the RICS property rather than accept a below market price. Rental Market Survey)

As a result of the increased supply, average rental values This recovery in rental values is consistent with our agent eased. As seen in the chart above, the biggest fall in survey where two-thirds of the respondents were more rental values over the last year has been in Knightsbridge, optimistic of the outlook over the next 6 months. Belgravia and Mayfair.

Who is Harriet Black?

Harriet brings to LonRes nearly 8 years of experience in the residential market after working for Savill’s research department where she was responsible for writing and publishing a series of highly respected regular research reports before heading up the research operation at property search company Garrington.

Prior to working at Savills, Harriet spent 6 years in the City at investment banks such as Lehman Brothers as a convertible bond analyst covering Asian markets. As well as providing many interesting travel opportunities, this role involved working closely with traders and sales people providing information and advice as well as putting together detailed analysis on a broad range of companies and working on corporate finance deals.

7 lonres.com | Newsletter | December 2009

Lettings Your Market Predictions for Lettings 2010

“As a result of slowly returning confidence in economy, falling ‘premium’ stock and an increase of quality domestic and international “We predict that after the erratic tenants. We believe we can certainly expect lettings market in NW3 throughout higher levels of rent the first quarter of 2010, 2009, 2010 will be busier with more and hope this trend will continue until the end people on the move and prices will of the year”. start to increase as stock is quite low”.

Nicole Ratzker Helen Kovari Aston Chase Admiral Property Partnership

NW3 “We have come through the worst and in 2010 we plan to build upon what we have “The lettings market in W11 is certainly achieved this year”. competitive with prices rising due to a decrease in stock. This is set to NW8 NW1 Georgina Parker continue into 2010 as the sales market EC1 Winkworth & Co strengthens”. W9 WC1 EC2 Keith Rigby EC4 Bective Leslie Marsh WC2 EC3 W1 “The return of the Corporate W2 Tenant – Enquiries from W11 corporate tenants and SE1 embassies has significantly increased with budgets ranging “Falling stock levels and W14 W8 SW7 uncertainties created by an from £800 to £2K per week. SW1 W2 has seen stock levels election year will serve as SW5 SE1 a boost to rental values in SW3 increase by 20% over the last 2010”. SW two months, ready for the new 10 year demand! ”. Terje Gilje SW8 Farrar & Co Richard Davies SW6 Chesterton Humberts SW11

SW15 SW18

“Demand will be high (applicant levels in our Battersea Park office were more than 100% up in November 09 compared to November 08) yet stock levels will come under pressure as more people will decide to continue to rent rather than buy, so tenants will have much less “Whilst there was a feeling of choice and rents will consequently go up. In uncertainty for this years rental market our Northcote Road office we have seen a lot it has not all been bad. If this activity of rental properties going onto the market for continues next year and we see sale, as landlords decide now is a good time previous rental levels return we should to sell due to the chronic shortage of available see a profitable 2010. All agents need properties to buy, thereby further reducing to stand firm on fees for 2010”. number of properties available to rent.”.

Louise Good Virginia Skilbeck John D Wood & Co Douglas & Gordon

8 We wish you a Merry Christmas and a Prosperous New Year

lonres.com limited | First Floor | 37 Battersea Square | London | SW11 3RA Telephone: 020 7924 6622