Aston Chase Quarterly Sales Report – Q2 2019
As we pass the halfway point in the calendar year, we have been looking back at our Q2 activity and comparing it not only to Q1, but also the same period in 2018. The first thing which is apparent is that the market, certainly in parts of London in which we operate, seems to be past its most recent low point both in terms of prices and transaction numbers.
Whilst Q2 sales activity in terms of total value is 25% down on Q1 (£47m vs £63m), it’s 47% up on the same period last year. There is little remaining doubt that whilst political uncertainty still reigns in the UK, long term homebuyers are perceiving value in the market, and committing their medium to long term future to London.
To put it another way, whilst some buyers are still ‘short’ on the cycle, most are ‘long’ on London, and whilst we have concluded less deals with European buyers in Q2, there have been an influx of enquiries from the Far East (most noticeably Hong Kong), Africa and the US. When one considers the real political uncertainty in places like Hong Kong, where the influence of China will surely become less and less benign, all of a sudden a Tory Leadership contest seems insignificant. The small matter of the ‘B’ word is clearly still causing some anxiety, but even the OBR’s most recent report suggesting that a no deal Brexit could knock 10% off house prices seems almost cheery when compared to Mark Carney’s December 2018 prediction of a 30% fall.
When you add to this mix the fact that Sterling continues to bump along at record lows, the pull of the London is surely greater than ever. Whilst like any other global centre it’s not immune to political and economic vagaries, it’s long term future is looking very good. One of the deals we have recently agreed to a Hong Kong national forms part of the Kings Cross development, and it’s hard not to be impressed when visiting the area. With incredible connectivity, a wealth of restaurants and shops, and companies like Facebook, Google, Universal Music and Nike committing their long term futures there, it’s easy to understand the allure of living and working in one of the world’s greatest cities.
Another trend which has also been very encouraging is the continued return to the market of British buyers, who made up 60% of the Q2 activity. With average sales prices up from Q1 by 30% to just over £4.7m, these buyers are committing themselves to long term family homes, where they can assuage some of the Stamp Duty related pain, and give themselves room to grow. This is one trend which seems to be here to stay, which explored in more detail earlier this year. Moving less, waiting longer between moves, and buying more long term homes. This is also reflected in the fact that enquiry numbers are also up between Q1 and Q2, albeit only by a small margin, at 10%.
Overall, we’re cautiously optimistic about the market. Whilst it’s still slightly more inconsistent and volatile than we’d like, the green shoots of recovery from the turn of the year are still pushing through. Given the way the market has performed over the past five or six years, it’s certainly an improvement!