When it comes to prime London property market, do not believe what you read in the papers.

After a long dark period of no activity the buzz is back in the prime London property market.

Despite news reports that in autumn the real property crash will come. The buzz has continued after the summer recess.

The activity in the prime London property market has been mainly driven by foreign investors. The Euro and the Dollar are both strong against the pound; this together with the lack of confidence amongst sellers makes buying London property an attractive investment.

The lack of property listings is also resulting in some fierce competition amongst buyers but generally when a seller commits to a buyer he stays with the deal.

Many buyers have also been waiting for that big crash. Majority of the people who own property in London’s prime areas can afford to sit and wait for the market to recover and the confidence to return.

What is evident is that properties that are put on the market are correctly priced and sell fast. Qualified buyers that have been waiting for a while to buy are grabbing opportunities and committing to purchase.

Those of us who are professionals working in the property market know that when the media reports negatively activity slows down. We have to sit and wait until confidence resumes.

The media’s global reporting of the credit crunch and a huge impact on activity but not so much on prices. There was certainly a correction from the 2007/08 boom but no major impact on prime property prices and no major bargains to be had.

Banks have also started to lend, albeit 50-60% loan to value but it’s a start.

Spring Fever in London Property Market

After a very quiet and gloomy period there is a buzz back in the market place. Contrary to media reports there were no bargains to be had in London’s prime areas. With interest rates at such low levels most owners can afford to hold and wait and they have.

The rental market however, has seen a pretty sharp decline. Flooded with properties that are not selling, it was reported by one leading property portal that there is 52% more stock on the market compared to this time last year.

As a result , rents are low and even existing tenants are trying to negotiate their rents down in midst tenancy, some for as much as 20%.

It is a good time to buy as competition is weak and it is easier to agree deals and proceed to exchanging contracts without the added stress of being gazumped.

The current activity in the market place is resulting from a few different factors.

It is firstly due to the fact that no new properties have been coming to the market so demand was stacking up waiting for supply.

Traditionally spring has always been the time to sell so we are seeing new instructions coming on daily at double the volumes of last quarter.

The Euro & the Dollar are also very strong against the pound so demand from overseas investors has been on the increase. Some say these conditions are a once in a life time opportunity, weaker prices , low confidence amongst sellers, strong currencies and low interest rates.

Its also a good time to renovate as construction

With so many transactions now happening off market, an increasing number of buyers are seeking representation and using the services of retained buying agents. Buying agent who have access to market intelligence and strong relationships within it can make the difference between finding the right property or losing it.

Prime London Property & the credit crunch 2009

Any properties that are on the open market for sale right now are those of distressed sellers or belong to people who have no intention of selling. The number of new sales properties coming to the market per day is 80% lower than this time last year.



In 2007 & 2008 prices rose by 30% this increase will be corrected in 2009. Any buyers who bought in 2007-2008, during the peak, are set to lose money unless they can afford to hold on to their properties for a long while.



In most prime areas there has already been a 20% correction in prices. This correction is for properties less than £10m.



Spring of 2009 should see a return of transactions. During the last quarter of 2008 most agents agreed that nothing was happening there were no deals to be done.



This was a result of no funding being available and buyers waiting for sellers to drop their prices. Many sellers have chosen to hold on for better times and in the meantime are turning to the rental market. Owners with tracker mortgages are also experiencing improved cash flows since interest rates are so low.



Depressed market conditions, strong Euro and Dollar are contributing towards an increase in demand from cash buyers and particularly investors looking to buy blocks of flats and distressed sales. However it is still hard to secure properties in super prime areas at a bargain price.



It is possible that the property market’s reaction to the financial crises is starting to settle. The dramatic decreases in prices have slowed down and rental activity has picked up.



It is predicted that unemployment may reach 18% , in this case this will result in properties belonging to city workers being the hardest hit. This being the case the price range likely to be most affected in 2009 will be £1-£2m (entry level for prime London property).



Once funding is more readily available an increase in activity should follow and if demand gets stronger it may be that we will not reach the 30% decrease in London’s prime areas but halt in the low to mid 20%’s.