Buying in London
Word on the street is that central London’s prime property market has reached its peak. If so, it may soon be a good time to consider buying.
After the financial crisis, London housing became one of the hottest assets in the world. However, high prices and a major tax-regime shift have helped cool the market for homes in Britain’s capital. The number of properties sold in prime central London fell 14 per cent in the third quarter of 2015, compared with the corresponding period a year earlier, according to data provider Lonres. The average price per square foot increased just 0,7 per cent to £1 832 (around R39 000).
How to Buy
On acceptance of a verbal offer, the agent will make a submission to both the buyer’s and the seller’s solicitors via a Memorandum of Sale. The former then has the opportunity to raise enquiries on the title. Once the completion dates have been agreed, the buyer will be required to pay 10 per cent of the purchase price. Only at this point is the contract between the parties binding and neither can withdraw without the risk of incurring penalties. On the date of completion, the solicitor will arrange to settle the remaining sum for the property and then register the title at the Land Registry and send the buyer evidence of registration. Thereafter, the property belongs to the new owner. (Note that mortgage offers tend to be slower – most mortgages come through within about five weeks of an application being submitted.)
Where to Buy
‘Over the past year, the strongest price growth has been seen in the less central locations,’ says Lucian Cook, a property researcher at Savills UK. ‘Prime southwest London – a band that runs from Battersea to Wandsworth and west to Wimbledon, Richmond and Chiswick – is up 14,7 per cent year-on-year. Similarly, prime north London, centred on Islington, is up 15,8 per cent year-on-year.’
What to Pay
‘The reality is that average values for London are now irrelevant,’ says Kate Faulkner from advice firm Property Checklists. ‘They run from £228 000 [about R4,9 million] to £1,2 million [around R25,7 million], depending on the area. It’s an international city, and just as there are thousands of property markets across the UK, there are hundreds of different markets within London. It’s all about local prices on local streets.’ That said, the average deposit for a first-time buyer is in the region of £50 000 (about R1,07 million).
- British Embassy in South Africa: british-consulate.org/british-embassy-in-south-africa.html
- Citizens Advice Bureau: citizensadvice.org.uk
- Property Checklists: propertychecklists.co.uk
- The UK’s largest property portal: rightmove.co.uk
- Savills UK: savills.co.uk
- Hamptons International: hamptons.co.uk
Text: Jocelyn Warrington