Prime central London is set to lead the way in 2022, with projected price increases beating the rest of the UK, according to leading estate agent Winkworth.
Winkworth’s latest episode of The Property Exchange podcast, The Year Ahead, looks at what will happen to prices, rents and the market. In the podcast, Winkworth Chief Executive Dominic Agace says: “We will see the return of prime central London. It has been most affected by the pandemic and it hasn’t gone anywhere for the past six years. There will be significant pick up. We are already seeing a 44 per cent increase in applicants for new properties in prime central London, compared to four per cent for suburban London and 36 per cent for country markets in the last quarter, compared to 2019 figures. This shows the buzz around properties in central London. This will lead to price increases in central London outperforming the rest of the UK.”
Winkworth has more than 100 offices nationwide, including 60 offices across the capital.
Dominic Agace predicts that traditional areas such as Kensington and Chelsea will head up the revival in prime central London, with the return of international buyers which make up 50 per cent of the market.
Prime central London will also lead the way on price growth. “ We are likely to see six to seven per cent growth next year. The country markets will continue at a lower rate, driven by a lack of supply, at around four to five per cent, with suburban London staying steady at three to four per cent, apart from the super suburbs that generally outperform.”
On potential interest rates changes, he says: “The Bank of England is very aware of the wealth held up in property and won’t want to upset the apple cart. It won’t be a huge stumbling block and it could lead to a more steady state above inflation trajectory for property prices.”
Dominic added: “We will see the steam coming off the country market. With working some days from home and some in the office, the blend makes it more viable than before the pandemic. We’ve had the big price increases of plus 10 per cent. With interest rates rising, they will retain their popularity.”
Investors will also see the return of capital growth to the prime London market, which could persuade landlords to remain in the rentals sector. Dominic Agace said: “Young professionals are back, students are back and AirBNB is picking up its properties again - a perfect storm of a shortage of properties and a surge in demand. It has been estimated that around 20 per cent of landlords were thinking of leaving the sector. Landlords want a safe investment. Rents growing above inflation and the capital growth element should appeal to landlords.”
Henry Synge, from the Winkworth office in South Kensington, says the outlook is bright for 2022: “People decided to wait and see and are now ready to buy - there is a sense of real optimism. Often seen as a precursor to a strong sales market, rentals were up by 100 per cent this Autumn when compared to 2019, and over that period we saw highest number of agreed tenancies in the past 10 years with the return of the students, professionals and most encouragingly the corporates. The US executives are back in town.”
The Property Exchange podcast is presented for Winkworth by broadcaster and commentator Anne Ashworth. To tune into the latest episode of The Property Exchange, find it here: