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Home > News > Buy Discounted London Property Now!

Buy Discounted London Property Now!

Monday, April 20, 2020

There are five reasons to buy London residential property right now as we come up to the biggest buying window we are ever likely to see.

Supply

We have discussed the supply situation over several articles. London is a restricted market. Old buildings are protected and the maximum planning options, if available, are usually one more floor in height. Sites where planning allows for skyscrapers are few and far between. Issues with “right of light” stopping new buildings overlooking older buildings and a Government planning bureaucracy that is slow moving have meant that London has fallen behind the optimistic new build targets set out in the “London plan” years ago, when Boris Johnston was Mayor of London.
The shortage of stock has been well documented and is now acute. This is being compounded now by virus associated issues closing building sites across London. Nothing is likely to be progressed this year on the New Build front.

Price

Prices either stood still or slumped over the five-year Brexit saga. This stagnation was set to change at the beginning of this year. A fresh new Government and solutions to Brexit made the market move sharply upwards in the first quarter.
Virus issues then took over and we have an immediate slump in the market. This slump is driven more by fear than property economics and as soon as “lock-downs” discontinue and the market starts to come back, perhaps by this coming Autumn, the sharp rise we saw in the Spring is likely to continue.

Tax

Rishi Sunak in this Spring’s Budget has offered a window of 12 months before a new 2% tax to overseas buyers is implemented. This allows a buying window for investors now.

Mortgages

Mortgage rates are at an all time low. Asian buyers can access rates as low as 3.1%, while standard rates average 3.35%. These rates are set to stay for the foreseeable future, as the Government will want to add stimulus to both the economy and the property market in U.K.

Currency

This brief chart shows year end exchange rates between US dollar and £ Sterling. The 2020 rate is the current rate of 1.26 US dollars to the pound.
2012 – 1.63
2013 – 1.66
2014 – 1.56
2015 –1.47
2016 –1.23
2017 –1.35
2018 –1.27
2019 –1.33
2020 –1.26
We are now seeing the lowest US/£ exchange rate for the past 10 years. As economies revive after the virus crisis, UK is set to move forward a lot faster than the US and by the end of this year we are likely to see a stronger pound sterling.
There is a window of opportunity now for the overseas buyer. Most developers have closed their London sites and property transactions have come to a standstill as the Government has advised people not to move house at this time.
This set of circumstances is going to make a number of developers offer quick discounts on New Build projects for buyers who are ready to commit now with immediate deposits on New Build flats.
Projects will quickly get restarted once lockdowns cease and prices are set to rise so now is an opportunity to get out there and hunt for good deals from developers on New Build projects.

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