As Land Registry figures taken from an online estate agent demonstrate, property prices across the UK continue to struggle in their aim to reach the pre-financial crash heights of 2008. Over a decade has passed since that peak in 2008 but the slower rise in property prices in the 21st century can clearly be seen. For instance, when filtering the results from the highest monthly rate of completed property sales, from January 1995 onwards, only one solitary month since 2008 features in the top 100.
“Although monthly numbers have recovered and are more than twice the level they were in 2009, completed transactions still appear extremely low.” Comments Sam Mitchell, HouseSimple CEO. “For example, in September 2017, there were 25,477 completed transactions, more than 18,000 less than average monthly sales pre-2008.”
In London, the hub of the UK property market, a fall in sales values has marked a crucial moment in the future direction of the market. The current trend of homeowners lowering the sale price of their homes has helped London become a perfect buyers’ market. Discounts on agreed sale prices in inner London have increased up to 10%, with an average of 4%, up from 0.5% in 2014. Many reasons have been put forward as to why this may be coming to a peak at this current time, but it is impossible to ignore the political tension and uncertainty caused by “you know what”.
These trends can be seen throughout multiple geographical areas and have affected every niche of the industry from renters and landlords, to First Time Buyers taking their first steps on the property ladder. This stretches even higher with potentially larger ramifications, depending on your standpoint, for those in high-end or luxury property, thought of to be over roughly £1,000,000 however that figure continues to rise.
With foreign investment decreasing and market uncertainty still hovering overhead, the wealthy are having a difficult time in shifting their high-end properties. A breathtaking statistic that over 1,900 ultra-luxury apartments built over the past year did not sell within their first year of being on the market. This is significantly overshadowed by the subtotal of all ten apartments at the top of the Shard, which despite having been on the market for over 5 years, remain empty at an estimated combined total of £50m.
There is, however, confidence in the luxury market and its ability to regain strength, as shown in a recent report into the Mayfair property market. Many luxury homeowners not wanting to take a substantial loss on their properties and with confidence in the slow but assured return of investment that property in this industry can provide, are searching for alternative ways to generate income from currently ‘dead weight’ properties. With a large percentage of high-end properties remaining on the market for over 4 months, vendors have begun considering a short-term option that until now had been seen as ‘better suited’ for the other end of the market.
In Summer 2017 Airbnb announced its plan to further their reach and rental market domination, by entering into the luxury accommodation market, helping to fill a gap in the market for guests who “prefer the amenities guaranteed by fancy hotels”. The American based company capitalised on the often slow nature of the sales market by offering a way to earn an extra line of income from property that was being ‘under-used’. While the higher end of the market may have snubbed at his idea initially, after seeing the results of its most recent years and the tremendous rate of expansion it would be foolish to not give this idea another look. Those looking to pursue this avenue would have the full backing of Airbnb and benefit greatly from its internal marketing budget as it looks to swell in this area of the market.
While global property markets may be experiencing varying price fluctuations and sales trends, it is clear to see the influence of western cultural trends in this day and age on the market, as all parties attempt to capitalise upon the increase in traffic that companies such as Airbnb have brought to this sector.