Will the ‘Boris Bounce’ lead to an increase in Canary Wharf property values?
An elected majority government in December 2019 brought an end to four years of stalemate in the house of commons and uncertainty in the financial and property markets.
Since the vote to leave the European Union on the 23rd June 2016, property values across London have fallen by approximately 3%.
At Fisks London we felt the uncertainty caused by the referendum result was the final straw, adding further pressure on a market that was already showing signs of overheating and suffering from an oversupply of new build property and a weakening global economy.
Sales instructions reduced as the majority of vendors adopted a ‘wait and see’ approach. Inevitably this lead to fewer properties available for buyers, so despite the uncertainty and negative sentiment, our vendors have been pleasantly surprised by the final agreed selling prices we achieved.
As we all know location is key, and demand for river facing apartments on Westferry Rd or property located in South Quay or other popular locations such as Narrow Street and Fairmont Avenue, Blackwall, remained strong during this challenging time.
Is this the return of positive sentiment?
Although it is too early to have any meaningful data on house price sales to analyse since the election result, there is unquestionable return of positivity amongst buyers. The sales team at Fisks London believe that the fourth quarter 2019 is likely to have represented the bottom of the market and many of our investor clients agree.
There have been reports that multi million pound prime Central London properties that had been stagnating in the market since the referendum result, have had sales agreed, subject to contract, in early January 2020. This is encouraging, as Prime Central London property sales are generally the first to slow when the market is in distress but the the first to increase when the market improves.
Due to the decline in capital values over the last three years, London now represents a good value for money, comparative to other international cities.
I am yet to read or hear market commentator who does not believe that London prices will increase in 2020.
Will this “Boris Bounce” continue for another five years? At Fisks London our view is: certainly, yes! The threat of recession has receded, the base rate remains low with the potential to reduce again, and there are plenty of first time buyers who now feel confident enough to make a property purchase and take advantage of the governments stamp duty incentives. There is still a shortage of good quality property in the market and at Fisks London we believe that the pent up demand could overtake supply.
Should we pop the champagne corks?
Perhaps just the one bottle for now! We still need to agree a trading deal with the EU and other partners. The Nationwide Building Society has reported that UK house prices increased by 1.4% year-on-year in December. Industry predictions for 2020 remain modest at between 1% and 2%. However, my view is that the value of second hand property in Canary Wharf and its environs could increase more aggressively. There is strong demand for one bedroom apartments in South Quay, Westferry, Narrow St and Blackwall priced between £350k – £450k and two bedroom apartments in the same locations between £550k – £650k.
Potential vendors will benefit from our experience of how to implement a marketing strategy needed to achieve maximum value.
Do not hesitate to contact us to discuss the current market value of your property.