A note from Tim - a realistic optimist's look at 2024

Greetings to you all. It’s that time of year when we put our finger in the air and endeavour to predict what the coming year will bring to the prime London property market.

What’s the outlook and ‘is now the right time to sell or buy’? The answer to this oft asked question is less about the ‘right time’, which assumes selling at the top for a vendor and bottom for the buyer. This effectively static property market is more about the individuals’ need for a home rather than a commodity. As with trading any commodity, if we all knew when the right time was to buy or sell, we would all be gloriously happy with our cleverness. What we do know is that since 4th December 2014 (how time flies), the day Stamp Duty hikes changed our market for good, the market has ebbed and flowed, with little other dramatic variation and this will continue. If you need to buy, buy now, if you need to sell, sell now. Simple.

I am a realistic optimist. I listen each year to buyers earnestly telling me about how the prime London market is going to drop 10% - 20% or worse in the coming year - the source is often a friend they spoke to at a dinner party. Cue the Beano thought bubble “So why are you calling me?”. It’s hardly booming but … really? On several occasions in 2023, expectations of buyers and sellers became more realistic, albeit often begrudgingly, as price reductions became common place.

Godson des Forges operate in the gardens and squares of prime central London

The key to our market, as always, is sentiment. When you have such extraordinary (I can’t use ‘unprecedented’, it gives me nausea) inflation and interest rates hikes, everything is affected, and these seismic changes can’t be ignored by vendors. The view that ‘all your buyers are cash so your market is unaffected’ is wrong. Buyers, previously, would have had cash but chose to raise debt to take advantage of the low rates, leaving their capital invested. When rates jumped, those buyers backed off, or at least reassessed their needs. So buyers coming into this market are ‘need driven’ and we hold onto them like a teenager holds their iPhone.

What has kept the values steady remains the continued good balance of supply and demand. Demand is down and crucially supply remains low which is a necessary tension to keep. The perceived, or actual, exponential cost of renovation in the last two years (let alone planning, listed building consent, building consent) is a key reason immaculately presented homes continue to attract most interest and thus, strong results. The New Homes market has greatly benefited here.

The last quarter of 2023 saw good footfall in our core market (principally, the traditional period building) but many buyers felt reticent to commit to a purchase. In December we agreed terms on a couple of homes, and so far in January, agreed four more. Two others exchanged in the first couple of weeks of January (thankfully, the buyers avoided dinner parties), and we’re off the mark. With rates and inflation falling (ish), sentiment will improve and with more realistic asking prices, we remain realistically optimistic.

Property in Onslow Square sold Autumn 23

There’s much to keep an eye on this year including elections here and, in the US, as well as the incredible turmoil and sadness in the Middle East and the wider region which only puts our problems at home into perspective. However much we would like to be the headline grabbers defiantly predicting double digit price increases, we won’t. It’s going to be another steady year with likely the first half of the year being stronger than the second half as attentions turn towards the General Election and what a Labour government could mean.