First-time buyers and the London property market don’t have the best of relationships, but there is optimism in the air as JLL reports a rise in first-time buyer activity in London, especially across the east and south east London
Brexit has sparked a lot of doom, gloom and negative press, especially when it comes to the UK economy and the property market, but every cloud has a silver lining.
While there is ‘a lot of speculation on the performance of the upper-end of the property market following the Brexit vote and other global political challenges, this is not representative of the whole market,’ says Michael Whittaker, Residential Director at JLL in Canary Wharf.
‘In fact, the level of new registrations remains stable, especially from first-time buyers and owner occupiers who have taken over all other demographics.
The number of investors has dropped making way for domestic purchasers, many of whom are first-time buyers
‘With changes to stamp duty and buy-to-let mortgages, the number of investors has dropped making way for domestic purchasers, many of whom are first-time buyers,’ he continues.
While buy-to-let lending has been weak throughout 2017, attributed to the Government’s 3% stamp duty hike on second homes in April 2016, the effect, as intended, has helped to free up property for first-time buyers.
First time buyers recognise ‘that this it is an attractive market to purchase in due to less competition from investors, little or no upwards price movement and a great choice of available properties,’ says Michael.
‘With less demand and competition alongside access to low mortgage rates, savvy first-time buyers are confident in securing a property, understanding that there are long-term benefits to be had.’
In fact, London house prices fell for the first time year-on-year since the financial crisis eight years ago, underperforming the rest of the UK, according to report released by Nationwide in September.
The average price of a home in London is £471,761, which is down by 0.6% for the period between July and September 2017, compared with the same period in 2016.
With less demand and competition alongside access to low mortgage rates, savvy first-time buyers are confident in securing a property
This made London the weakest performing region for the first time since 2005, with house prices down 0.6% year-on-year. It might sound disastrous, but something has needed to give on London’s property market for a long time, and first-time buyers are taking advantage.
‘Our first-time buyers are generally looking for a one-two bedroom apartment within a modern development,’ says Michael. ‘Canary Wharf remains popular, alongside neighbouring communities including, Poplar, Limehouse, Bow, and Royal Docks.’
‘Our office in Stratford opened its doors 18 months ago,’ adds Jack Arkell, property consultant at JLL in Stratford, ‘and we have seen an increasing demand from first-time buyers with many sales this year in developments such as Glasshouse Gardens, Stratosphere, Chobham Manor, River Heights and Capital Towers.
‘We aren’t just selling to young professionals but families too, who are attracted to Stratford’s blend of superb transport links and family friendly attractions across Westfield, the Queen Elizabeth Park and former Olympic facilities.
‘With the Chancellor of the Exchequer rumoured to be cutting stamp duty for first-time buyers, we expect to see a further rise in first-time buyers,’ continues Jack.