The Inner London residential property market is now product-led rather than location-led, with buyers prioritising newly built or refurbished homes with less emphasis on location, with purchasers no longer obsessed with living on particular roads if new product is not available.
These are just some of insights into how the London market has changed over the last three years revealed by Inner London estate agent Aston Chase.
Aston Chase says that three years ago over 80 per cent of clients looking for a home in Inner London would focus on buying on particular roads or within particular locations, only investigating the actual product for sale once they had identified their preferred addresses.
Aston Chase says that the situation is now completely transformed, with currently around 65 per cent of their clients seeking high quality newly built or recently refurbished homes, with far less emphasis on the exact road. Amongst overseas clients – many of whom have always lived in luxury new build addresses – over 80 per cent will only consider “turn key’ properties which are newly built, fully dressed and ready for immediate hotel-style occupation.
Aston Chase says that because of these changes the residential property market in Inner London has become polarised between buyers prioritising ‘turn key’ product – and therefore looking for locations where developers are highly active and building new homes (developer-led areas) – and other buyers who prioritise particular roads or addresses.
Aston Chase reveal that the top four developer-led locations in London (where there are new homes available for sale or in the development pipeline) are Marylebone (where new build or newly refuribhsed homes sell for GBP2,500 to GBP4,000 per sq.ft), St Johns Wood (GBP2,500), Bayswater (GBP1,500 to GBP2,000 per sq ft) and Camden (1,250 to GBP1,750 per sq ft).
Aston Chase highlight that new developments favoured by clients include The Compton and Hamilton Drive in St Johns Wood, Chiltern Place and The Chilterns in Marylebone, The Park Crescent and The Regent’s Crescent in Regent’s Park, Buxmead in Hampstead, Queen’s Park Place in Queen’s Park, and Chappell Lofts in Camden.
Aston Chase points out that because of the weakness of Pound Sterling in relation to the Dollar, Dollar based purchasers particularly those from the Middle East (Saudi Arabia, Qatar and Bahrain), West Africa (Nigeria and Sierra Leone) and Asia (Indonesia and Jakarta) have been buying property in Central London over the last six months, many buying in the top five development-led locations the agency has identified.
Aston Chase observes that even amongst their clients who still give priority to living on a particular road or in a very specific location there is a high demand for newly refurbished or new build homes.
Aston Chase says that where this type of product is lacking on a particular road, this often results in the client having to heavily refurbish the property in order to bring it up to a luxury new build standard. If planning permission is involved in this work, this can often mean that a buyer ends up having a refurbishment project that can take up to 18-36 months before their home is ready for occupation – a reason why an increasing number of clients seek newly built or recently refurbished homes so that they can avoid this type of hassle and delay.
Because of the growing demand for new development product, Aston Chase’s New Homes Department has experienced exponential growth over the last three years.
Back in 2015, the Aston Chase New Homes Department handled a portfolio of new homes worth GBP50 million. In 2016 this had risen to GBP150 million, and currently Aston Chase are managing a new development portfolio of over GBP350 million worth of property.
Mark Pollack, Founding Director of Aston Chase, says: “Since the 2017 General Election Inner London resi sales have been very much driven by overseas buyers and they prefer ‘turn key’ new homes rather than second hand product which is why the premium market has become very development led. The market is now product-let rather than location-led with buyers much more focused on interiors, specification and lifestyle amenities rather than specific roads.”
Simon Deen, Director & Head of New Homes at Aston Chase, says: “The Inner London residential market has now polarised, with the majority of buyers, especially overseas purchasers, wanting new build or newly refurbished product. Even where second hand homes are purchased, buyers are then wanting them refurbished so they are modernised and given new interiors. Because the market has become very development led it has opened up central but previously overlooked locations such as Bayswater and Camden where previously our clients would have only looked at Marylebone, St Johns Wood and Regent’s Park.”