Aston Chase Quarterly Report, Q3 2019
We are looking back over Aston Chase’s third quarter 2019 activity at a unique time in British politics. Brexit has now been delayed twice, and we’re counting down to the third General Election in four and a half years. Depending on who the next Prime Minister is, we’ll either be likely leaving the EU by the end of January, or following yet another period of re-negotiation, voting in a second referendum.
However despite a continuation of political and economic uncertainty throughout the summer months, we nevertheless saw a surprisingly high level of activity - a remarkable 120% increase in total sales concluded compared to the same period in 2018 (£77m vs £35m), and an 63% increase compared to Q2 of 2019 (£77m vs £47m). This showed that despite the prevailing circumstances, London remained a place of relative global stability, and of course a world class centre for education, amenities and transport. A total of sixteen deals were concluded, with nine exchanging in September alone.
In terms of buyer demographics, we concluded 25% of these deals to British buyers (down from 60% in Q2), 25% to Hong Kong buyers and the remainder to buyers from China, Australia, the Middle East and Switzerland.
The main takeaways from this period were;
- The continued influx of Hong Kong based buyers in to the London market, due to both extreme political uncertainty and exchange rate gains for non-Sterling buyers
- International buyers in general taking advantage of both exchange rate gains and price corrections in the London market
- Domestic buyers cautiously continuing their return to the market, albeit only for long term purchases at prices which reflect not only where the market currently is, but also factoring in further potential uncertainty.
- An increasing number of enquiries from non-property portal sources
- An increased number of deals outside areas which we would have traditionally considered to be our core operating post codes
On the last two points above, we have written before about the increasing influence of Google, Facebook and Instagram on property advertising. It’s a trend which we’re seeing as increasingly instrumental in both how we market our clients properties, and how we think about overall marketing budgets in relation to both print media and the two main property portals, Zoopla and Rightmove. Taking the last quarter as an example, if 75% of buyers are from overseas, and many of them aren’t aware of the main property portals, then it makes sense to try and focus marketing spend on driving traffic to our own website, and that means utilising both social media and Google more than ever before.
In a similar vein, once a foreign buyer has found their way to Aston Chase, thanks to semi-open source platforms like www.lonres.com, excellent inter agency relationships and more than ever, the social media presence of an increasing number of brokers, finding these buyers properties outside of our traditional core post codes has become easier. Our recent deal at The Corinthia Apartments was a perfect example of all of the above situations in play, and one which we are expecting to see more of in the future. Rather than deal with a multitude of broker, buyers are increasingly looking for a single person to cover their property needs – as a lot of them are used to in their own countries.
To conclude, whilst some domestic buyers have tentatively dipped their toes back in to the market so far in 2019, there is undoubtedly still a good amount of pent up demand from more cautious buyers. Whilst thus far they have lacked the confidence to buy due to ongoing political and economic uncertainty, the result of the General Election could well change this. Whilst tight supply has become more of an issue as 2019 has progressed, this might free up if vendors feel that the market is moving again.
On the flip side, foreign buyers have had a decent run at a relatively inexpensive London market. With all the major political parties announcing an increase in Stamp Duty for foreign buyers, we might see this trend slow in the early part of 2020, especially if there’s a strengthening of Sterling against the Dollar and the Euro.
Time will tell, but if the last couple of years has taught us anything, it’s to expect the unexpected!