Follow our property guide to the London Marathon
The annual 26-mile race is the ultimate spectator sport for those who want to window-shop for a home in a new part of the capital
Homes for sale along the London Marathon route (PDF)
For Londoners, a spot of house-coveting is a popular diversion on a weekend stroll. The Flora London Marathon on Sunday will present runners and spectators with a perfect opportunity to indulge in a bit of property lust, especially if they are looking for a new home. Rightmove says that 1,000 homes across the capital had their prices reduced by more than 2 per cent last week, which should mean plenty of choice.
The route starts in Blackheath, moves east to Woolwich and then back west through Greenwich and Bermondsey. It then winds through Shadwell, heading down to Millwall and up to Poplar before moving west through the City and Westminster to the finish line in St James’s Park.
Along the way is the whole gamut of London housing, from East End high rise to swish penthouse apartments along the river, to the grand terraces of Blackheath. In our map on the right, all the homes are valued at less than £1 million. However, variations in desirability and quality en route are reflected in huge differences in typical prices from postcode to postcode. A three-bedroom flat in the plush area around St James’s is priced at £1.05 million on Globrix.com, while a similar-sized flat on Trafalgar Road near the centre of Greenwich is £430,000, and only £234,995 on the less salubrious Poplar High Street.
On this tour of London property, runners might note telltale signs of a market in flux — the ubiquity of To Let signs in each part of the course, especially around Docklands, and the scarcity of For Sale boards. These signs reveal a common theme among London homeowners: the reluctance to sell up. When faced with a decision to sell a house, most will instead try to let. This is in stark contrast to much higher demand from would-be buyers.
Liam Bailey, head of residential research for Knight Frank, says: “Sellers do not like the look of these prices, which means there are lots of people viewing a small pool of property.”
Interest from London buyers has risen by 20 per cent since last year, according to Knight Frank, compared with a 30 per cent fall in supply. Buyers are attracted by price falls: the average price of a home in London is now £293,401, compared with £329,195 this time last year, according to government figures. However, buyers’ intentions are failing to translate into purchases in cases where buyers do not have a big enough deposit to obtain the best mortgage rates.
The extent of price falls is also to blame for deterring sellers — a demand-versus-supply imbalance that is starting to produce offers over the asking price for most-wanted properties in many parts of London.
Kinleigh Folkard & Hayward (KFH), the London agent, this month reported offers over asking prices in areas from chi-chi Muswell Hill to up-and-coming Forest Hill. Competition among buyers is particularly evident in the family home market. Roarie Scarisbrick, of the buying agent PropertyVision, says: “Many families sat on their hands in the bull market, either renting or bursting out of their existing houses, and see this as an opportune moment to get on with life.” This is borne out by an increase in buyers trading up in suburban areas such as Kennington, according to KFH.
Knight Frank expects supply to contract even further over the next three months, which may boost prices. However, the outlook now depends on the type of property.
Prices in London’s new-build market, centred in the Olympic east, fell sharply by about 40 per cent before Christmas. They have not budged down or up since and are not expected to change for some time, because — despite an increase in interest from investors chasing rental yields of 10 per cent or more — demand in this market still lags supply because of a lack of first-time buyers.
However, with all those aspiring owners unable to secure a mortgage, the case for buy-to-let investors with cash is compelling. Russell Taylor, director of DTZ Residential, says: “Almost 4,000 units will complete in the Docklands this year. Apartments in Canary Wharf are going for half-price in an area where incomes are higher than average.” Foreign investors will also benefit from the weakness of sterling, meaning an effective price discount, Bailey says.
Second-hand homes have fallen in value by 20-25 per cent, with another 5-10 per cent drop expected by the end of this year, before they begin to stabilise. Property priced above £1 million has fallen farther, by an average 30 per cent from the peak, Knight Frank says, reflecting the boom in this market before the downturn. Bailey says: “Top-end properties soared when London was regarded as the centre of the universe, which explains why they have been harder hit.”
Anticipating extra interest in distressed prime property, London Central Portfolio has set up a fund to stockpick homes in areas such as Knightsbridge and Mayfair for investors with at least £50,000. However, John D. Wood, the estate agent, says that the prices of prime houses have begun to rise but that prime flats continue to fall, reflecting the desire for larger family homes.
There are still more million-pound-plus pads in London than anywhere else. The three most expensive parts of the country are in London: Kensington W8, Chelsea SW3 and Knightsbridge SW7, according to zoopla.co.uk, the property search website. One property in Kensington Palace Gardens, the home of the steel magnate Lakshmi Mittal, recently went on the market for £100 million. Such sums might still seem excessive in a downturn, but, as Bailey says: “It’s just that even after a price fall of £10 million, a super-prime property still looks expensive.”
Copyright 2009 Times Newspapers Ltd.
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