The London housing market has broken up for Christmas. Sales for the three months to October edged down one per cent on the same quarter of last year, with the blame pinned on the last hike in stamp duty, Brexit wobbles and unrealistically high asking prices.
Vendors appear happy to wait for the right offer rather than lower their price expectations, while prospective first-time buyers are sticking with renting. The result is that fewer people are on the move, at least in London.
However, outside the capital there has been an unexpected bounce in activity from out-of-towners seeking to move back into the city.
Among the popular pockets attracting these returners are Maida Vale, Bankside, Mortlake, Ealing and super-cool swathes of east London. Marylebone and Notting Hill are also considered — but normally dismissed as beyond the budget.
The level of buyers coming into the capital has hit a 10-year high. In 2007, 11.7 per cent of London properties were bought by new entrants, fresh figures from Hamptons International show.
This number has climbed over the decade to 14.3 per cent this year, with the vast majority — 80 per cent — coming from the home counties.
According to Hamptons analyst David Fell, many of these buyers are Londoners who bought their first home in the capital, then moved out to the home counties for a family home.
BABY BOOMER-ANGS BACK IN TOWN
Now that the children are grown up they are heading back to the bright lights of a city packed with culture and cafés.
This generation owns £1.5 trillion of housing equity, which equates to 43 per cent of the UK’s property wealth, and a healthy chunk of that is being ploughed back into London.
The housing price gap between the capital and the rest of the South-East peaked last year and has been slowly closing, encouraging the baby boomer generation to cash in and come back.
WHERE TO BUY
“World-class transport links and new developments with plenty of amenities on tap have made London an attractive destination for retirees,” says Fell.
“Many are happy to trade in their big space for smaller space and a smarter neighbourhood, most likely paying cash or putting down a big deposit.
“We have seen sellers who have a choice between selling to a buyer from London or a buyer from outside the M25 and they go for the latter. It’s just an easier sales procedure all round,” Fell adds.
Hampshire resident Helen Whitten is selling her large 19th-century thatched cottage in a small village near the market town of Alton that was once home to Jane Austen.
The house, spread over 3,000sq ft, has a wine cellar, games room and outbuildings.
Sitting on a third of an acre it’s “perfect for a family moving out of London”, says the 67 year-old. It’s on the market for £899,950 with Hamptons.
Ms Whitten, who sold her coaching business last year and previously owned an apartment in South Kensington, wants to buy in Kew with her partner, David Beales, to be near her grandchildren.
“It’s not just about being on demand for the family but we love the theatre and galleries, too. There is just so much to do in London and it is not always expensive,” she says.
Her generation is also powering another kind of property purchaser from out of town: the lucky first-time buyer looking for a home in London with help from the Bank of Mum and Dad, after the parents sell their country house and release capital.
Maida Vale is highlighted by Becky Fatemi of estate agents Rokstone: “It has a village feel and it’s good value for money compared with Notting Hill and Marylebone. We’ve also had a mini surge of bankers returning to buy boltholes in London, having taken their families abroad a few years ago to the likes of France and Portugal.”
The older generation is holding all the cards, confirms Fatemi.
CHILDREN OF BOOMERS REAP PROPERTY REWARDS TOO
Children of parents returning to London often share in the rewards. Cash released from the sale of a big family home out of town can be used to give struggling young adults a leg up on to the property ladder.
Insurance worker Will Stickler, 27, and his brother Sam have halved their commute by moving from the family home in Tunbridge Wells to Woolwich to buy a two-bedroom, two-bathroom apartment in Trinity Walk, a development by Lovell Homes.
Using the Government Help to Buy shared equity scheme, they bought their new place off-plan for £455,000 with a five per cent deposit. The mortgage is about £1,000 a month between them and the service charge is roughly £1,800 per year.
“Our new home in Woolwich means our commute will be 25 minutes on the Docklands Light Railway — considerably different from Kent,” says Will.
Spurred by the much-anticipated arrival of Crossrail in Woolwich in a year’s time, riverside apartment blocks are springing up and house prices in the borough have risen 60.7 per cent in the last five years — almost double the rate of house price growth across London over the same period.