The Christmas lights may be up in Oxford Street, but for the Prime property market it’s still very much business as usual in the last few weeks before the festivities. Looking back over the past few months, the Prime market hasn’t been as strong as many would have predicted this time last year, although it has at least remained relatively stable. Across Prime London property prices rose by a fairly soft 2.3% in the six months to the end of September 2015. This was mainly as a result of a delayed ‘ripple effect’ from price falls triggered after the new stamp duty rates were announced in December 2014.

The strongest performers were properties at the lower end of the prime market – those of £1million and below. Because these were least effected by the change in stamp duty, they have continued to hold their value and are in high demand. Into this category falls the desirable one and two-bedroom apartments and smaller properties in up and coming Prime areas such as the Isle of Dogs (E14), Shoreditch and Greenwich. Highly sought after by young professionals, they’re also very popular with overseas investors building up portfolios of buy-to-let properties for the corporate market. Short-term leases produce high yields, and are a good way to maximise the annual rental return on multiple-property portfolios.

 

An early Christmas present

However, the best way to really push up those annual rental returns is to have continuous occupancy. But guaranteeing that over the festive period can be difficult. “The end of the year is often a very transient time in the employment market, especially among overseas professionals working in the UK on short contracts,” explains Joel Brookes from Vanet. “Last month, we discussed how high-end apartments were in particular demand on the rental market. But there is often this gap during December and early January, when the last thing on tenants’ minds is moving to a new apartment. The trick is to get tenants in early in the month, giving them time to settle into their new home and ensuring that, for the landlord, there isn’t a three to six-week gap where an apartment is vacant and not delivering a yield of any kind,” he adds.

At this time of the year, fast turnarounds matter to maximise yields for landlords, and to help those selling a property get everything signed and sealed before the barren weeks of early January. “Getting a property sold before Christmas is a priority for vendors at this time of the year,” comments Joel. “So while other industries are winding down for the festivities, the prime property market is working flat out to get everything wrapped up before end of business on Christmas Eve. It’s a bit of a mad dash to the finish, but that’s what we’re good at – moving property quickly and efficiently to maximise our clients’ returns and give them that early Christmas present!” he adds.

 

A spread of new Prime areas

Last month we discussed how a cluster of new Prime areas are emerging throughout the capital. While areas such as Docklands, Canary Wharf and E14 continue to represent the most desirable locations, other neighbourhoods are now on the rise, including Greenwich on the south side of the river, Woolwich and Canning Town. The rise in interest in Prime property in London could actually create a shortage of availability as we move into 2016, meaning demand is going to increase proportionally. However, this doesn’t necessarily translate into an increase in prices, as other factors put the brakes on any ‘housing bubble’ that may form as a result. So while some investors may be tempted to wait and see if their property values increase before putting them on the market, the industry believes that could be the wrong strategy.

“The traditional time to sell is the spring, but we believe that the winter months are actually one of the better times to put your property on the market, or offer up property for rent,” comments Joel Brookes from Vanet. “At this time of the year you get serious buyers looking to move quickly on opportunities, and as there are fewer properties on the books at this time of the year, the ones that are there have a greater chance of being seen by the right buyer,” he adds.

So while everyone else is planning the Christmas party, smart investors are planning a profitable 2016 by expanding their Prime property portfolios, particularly in the buy-to-let market. “We’ve been predicting for much of this year that the market would start to become more active in 2016, and all indicators are that this will happen,” says Joel. “Investors looking to buy or let Prime property in London would do well to move earlier, rather than later, to take maximum advantage of what we think is going to be a very Happy New Year for the property market!” he concludes.

 
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.