There has been a lot of talk this year about the softening of the market and how difficult it is for homeowners planning to sell. Good news for those considering selling real estate. As we reach the end of the first quarter, solid demand for home ownership in London brings new hope.
Foxtons' annual report, The London Report 2023, has recently been published. In it, we discuss our cautious predictions for the market in 2023 and the promising ways in which London has diverged from those predictions.
The job market remains strong The recession is expected to be shallow and short-lived Inflation has peaked Interest rate forecasts have been lowered Mortgage rates are settling at 4% instead of the expected 6%
First-time buyers appear to be playing a big role in keeping the market moving this year. 
“The rising cost of living and mortgages will deter some first-time buyers, but the rise in the rental market is supported by stamp duty exemptions for first-time buyers under £425,000 and fees of up to £1. 625,000 may encourage some people to make purchasing decisions.
~ London Report 2023
Rightmove's recent house price index served to confirm these predictions. It shows the number of sales agreements has risen to pre-pandemic levels, with London driven by sales of typical first-time buyer homes such as one- and two-bed flats (Rightmove article) ).
flat is back
If you're looking to sell your London flat, 2023 could be the year. Especially during the pandemic, buyers coveted homes with buckets of extra space. London apartments could be back in style this year as buyers focus on the best value for money (Zoopla article). We are already seeing signs of this happening in 2022, with sales of studio and one-bed apartments in Zone 1 increasing by 40% annually (The London Report 2023, “Growth of Commutable London'').
What will motivate buyers in 2023?
there must be a need
For many of us, buying or selling real estate is a needs-based decision. Families grow, we need to live near good schools, we have new jobs and new commutes, our kids move, we retire, and we move to accommodate changes in our lives.
best plan
“Currently, one in two flats is sold at zero rate (no stamp duty), compared to just one in four before the September changes.”
~ London Report 2023
Recently, high demand and low inventory have put upward pressure on rental prices.
Combined with today's increased stamp duty savings for first-time buyers, there is every reason for renters to take their first step on the property ladder by filing their notice.
go up
Needs-based buying is here to stay, but there's no such thing as bad news for London's property market. As the media predicts a softening market, buyers interested in entering or upgrading to the London market see opportunity in neon letters. 2023 is a perfect market for upsizing because “homes being sold often have lower discounts in value than homes being purchased.” (London Report, page 2).
There are two major trends that are impacting the upsizing of second steppers in the market. Last-time first-time buyer homes will find favor among the 2023 crowd as demand increases at the lower end of the market. Choice and re-pricing at the upper end of the market is also progressing, as Zoopla's House Price Index reveals. “This has resulted in sales being agreed at 4% below the asking price, or an average of £14,000, representing the biggest savings on house prices for “more expensive properties'' (Zoopra article).
long game
Whether you're a buyer, a seller, or both, there's more to London real estate than the sash windows, tiled walkways, capital city amenities and iconic river that runs through it…The numbers If you're just looking at it, here's why. What you want to trade on is London's long-term resilience. Whether it was the global financial crisis, the EU referendum or a global pandemic, nothing could stop London's long-term house price growth over the past two decades. Naturally, stocks are limited and it has a very global appeal.
If you want to sell, let's get started.
Buyer demand is much stronger in 2023 than originally expected, and our negotiators will take full advantage of this to close your property sale. The level of applicants is also improving and buyers are becoming more active. Unlike other agencies, all Foxtons offices across London are linked together, so we can move these active buyers and ensure they fall in love no matter which Foxtons office they walk into. I can show you around the house.
Schedule an appraisal with a local professional to see how your property could perform in this unique market.
