Two property experts offer their summaries of 2014 – and what we can expect in 2015, both before and after the general election
Kieran Ryan, Managing Director at Rickman Properties Ltd
From the commencement of 2014 until August, we experienced a healthy, steady flow of successful sales and corporate lettings. It was from the early part of August that we began to see a sharp slowdown in the sales department which, after speaking to other professional colleagues in our area, seems very apparent throughout central London.
It is mainly the applicant level that has dropped with fewer enquiries. The reasons? Well, we have heard many, from blaming the Ebola crisis and an anticipated interest rate hike (statement issued by Mark Carney, Governor of the Bank of England) to the crisis in the Middle East. However, it didn’t really help when David Cameron went on television to warn of a possible danger of a double-dip recession, after Mark Carney’s statement. We are still not sure why, when you look at rental returns currently achieving around 3% versus bank savings rate below 1%?
We are expecting a slow start at the beginning of 2015 but are anticipating that interest rates will remain at the all-time low for a couple more years, but with the general election looming, who knows what lies ahead? The talk of the totally unfair mansion tax is very much debated here in Kensington and Chelsea, with a very high ratio of properties in excess of the £2m value; this will certainly not be a vote winner.
020 7937 9777; rickmanproperties.com
Sophie Roberts, Head of Search and Acquisitions at Banda Property
2014 has been a hugely successful year for Banda Property on both the search and development side. We have invested in a number of new appointments to the team, including several on the acquisition side, bringing the total in the office to 12. We have also significantly grown our off-plan provision, resulting from a growth in this area that we’ve identified.
There is a changing mindset amongst buyers who are becoming more open to securing property off-plan, but are in need of professional advice to ensure they make the best investment. The main external influences on the property market for 2015 will be the inevitable rise of interest rates and the general election. The market is likely to quieten down early next year in the run up to the election, as buyers feel uncertain about investing. However, because of this, there is likely to be an opportunity between January and May to secure a property that demonstrates good value, as competition will be less fierce.
Historically, there has been an immediate rise in property transactions following general elections, and as such, getting in before May is advisable. Following the Autumn Statement it would appear that the mansion tax debate has been answered in part with the changes to the Stamp Duty Land Tax structure, however, many buyers – especially international ones – will wait until after the election to re-enter the London property market.
020 7937 9600; bandaproperty.co.uk