East London residential; our patch, our view Q2 2016
Over the last several decades East London has been completely transformed. It is now a highly desirable place to live and new infrastructure and industry continues to draw people to the area. As a result, this region of London is seeing a significant amount of development, with areas like Stratford and Greenwich Peninsula now putting East London in the global spotlight.
Overall, growth in the London market remained robust, albeit with a slight moderation in Q2. Nationwide recorded annual growth of 9.9%, down slightly from the 11.5% recorded in Q1. This growth was driven by strong activity in the first quarter, with sales volumes doubling in March as investors clambered to avoid paying an additional 3% stamp duty on their purchases.
At the time of writing, it has been less than a month since the UK voted to leave the European Union, and it is too early to tell if there will be any significant impact on the market as a result. However, the fundamental drivers of London’s property market are not affected by the decision to leave. In fact, the prospect of declining interest rates and a weaker sterling could serve to boost demand further in the wake of the vote.
CBRE East London did experience a fall in activity in the second quarter, but this was largely expected. The approaching EU referendum led to a plethora of negative forecasts for the residential market which led buyers to delay decision making. This was combined with the introduction of additional stamp duty in April, which naturally curtailed investor demand.
However, while activity declined, it still remained robust with the team agreeing the sale of £80m worth of property. In addition, investors still accounted for three-quarters of sales: an encouraging sign that investor sentiment for the London residential market remains positive, despite the additional rate of stamp duty.