Now that the election is ancient history, we can finally settle down to a relatively stable period in the property market. However, while we may be back to a ‘business as usual’ scenario in most of the prime areas such as the West End, Chelsea, Kensington and up-coming locations such as Wandsworth and Battersea, the focus is still firmly fixed on London’s East End.
 
Why is the East End such an attraction?
 
Two words – Canary Wharf. This ultra-modern area of London has all but taken over from the Square Mile as the beating commercial heart of the capital. Consequently, demand for prime property in Canary Wharf, Shoreditch, E14 and Bow is exploding.
 
There is, however, one slight issue with Canary Wharf, and that is as in all good markets, demand is dramatically outstripping supply. Canary Wharf in particular is a very small area, which means it is densely packed and there are very limited opportunities for future development. What developments there are attract considerable attention, particularly from overseas investors. Many of these investors recognise that the financial sector based in the area is of international importance, and as such demand for both permanent and rental property for overseas employees is extremely high. As a result, it is smaller properties that are highest on most investors wish lists, such as luxury apartments and penthouse properties in multi-occupancy developments.
 
Property prices in London surging up
 
The last time that the property market in London saw a big surge in prices was back in 2013, when the city was feeling far more positive about the financial future after the darkest days of the recession. Now, the market appears to be building up a head of steam once again, but supply is struggling to keep up with demand. Across the board, the number of properties coming to market has contracted by around 8% compared to last year, which has driven the prices of properties that are available up even further.
 
At the same time, demand is as high if not higher than before, which could potentially cause a property bubble to start forming. The only way to cool the market and protect investments is to look a little further afield, and that means moving out of E14 and into the surrounding areas. Canning Town, Shoreditch and Plaistow are cited as up and coming Prime areas, with Shoreditch leading the charge. Developments in E16 are also due to come online over the coming years, but whether that will be soon enough to cool down an overheating market remains to be seen.
 
A great time to be a property developer
 
At the moment, it is a great time to be a property developer in the East End prime market, as you are almost guaranteed full occupancy of any rental property and a very quick sale for freehold or leasehold properties too. Enthusiasm for Canary Wharf and E14 prime property is particularly high among overseas investors, who represent an important percentage of buyers, both as investors and as end users.
 
Go East
 
The area east of Canary Wharf was considered to be an undesirable area for many years. It was run down and investment in the area had been limited. Now, however, because of the ‘overspill’ factor as the more desirable locations fill up, the east of the area is now seeing more investment and development. Go east, and you’ll find a whole new prime market opening up.
 
A more rigid market
 
Since the general election one thing has become noticeable, and that is the fact that sellers and developers are much more rigid in their asking prices. There appears to be far less room for negotiation, mainly because developers are now fully aware that it is a ‘seller’s market’ right now, thanks to demand outstripping supply in the prime market in particular. With prices demonstrating a steady increase month on month, expect negotiations when buying London prime property to be tough.
 
The lettings market
 
Recently there has been a growing trend among landlords in Canary Wharf requiring not just a letting service, but a full management service. This is often because landlords and developers are based overseas, and need a property manager to look after their interests in the UK.
 
By return, tenants, particularly those in prime locations in and around Canary Wharf, are choosing to negotiate longer tenancy contracts, creating a highly competitive rental market where property is rented out almost as soon as it is listed.
 
In summary
 
Overall, June has proved to be very similar to May – demand is still high and competition for property in both the freehold/leasehold sales and rentals is fierce. Supply is tight and, despite a flurry of developments beyond the E14 and E15 boundaries, set to stay that way for the foreseeable future. This will create a deficit of supply, driving prices up. This volatile mix makes it an exceptionally good time to be a property developer or to build up a portfolio of properties in the Canary Wharf / East London market. But for tenants and buyers, they could be facing some tough rounds of negotiating on price, with little chance of any movement on the advertised asking prices for properties.
 
All figures and quotes are accurate at the time of publishing  

Sales: Vanet Property Asset Management is a trading name of Countrywide Estate Agents,
Registered in England Number 00789476. Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP

Lettings: Vanet Property Asset Management is a trading name of Countrywide Residential Lettings Limited, Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP.
Registered in England Number 02995024 which is an agent and subsidiary of Countrywide Estate Agents, Registered Office: Greenwood House, 1st Floor, 91-99 New London Road, Chelmsford, Essex, CM2 0PP.

Registered in England Number 00789476. Countrywide Residential Lettings Limited is regulated by RICS. Countrywide Estate Agents is an appointed representative of Countrywide Principal Services Limited which is authorised and regulated by the Financial Conduct Authority.