Even though there is some indication homeowners are moving to the outer reaches of London, there is also evidence that new buyers are entering Inner London.
The study suggests, for the first time in five years, a greater number of young buyers are purchasing homes in Inner London than in Outer London. There has been an increase in enquiries and sales for homes in Zones 2 and 3 from these buyers. With the London Borough of Hackney fall in Zone 2, this is an area many buyers hold an interest in.
First-time buyers heading to Zones 2 and 3
The study carried out by Hamptons International indicates that homes sold to first-time buyers in Inner London rose from 28% of all sales before lockdown to 35% of all sales after lockdown. At the same time, the proportion of properties sold to first-time buyers in Outer London, Zones 4, 5 and 5, dropped by 5%, from 26% to 31%.
David Fell is an analyst at Hamptons, and he said; “There has undoubtedly been a shift in buyer preferences over the last five months towards having space both inside and out. But this shift has been less pronounced among first-time buyers. They put their location and surrounding activities over household space. So, while some second and third steppers have increasingly chosen outer London over inner, first-time buyers have not been swayed in the same way.”
While the stamp duty holiday is mainly seen as a benefit for established home owners, the additional cost of London property is likely to be of benefit to first-time buyers too.
As of November 2020, Rightmove states; “Properties in Stoke Newington had an overall average price of £675,392 over the last year. The majority of sales in Stoke Newington during the last year were flats, selling for an average price of £486,345. Terraced properties sold for an average of £1,102,591, with semi-detached properties fetching £1,074,000. Overall, sold prices in Stoke Newington over the last year were 2% up on the previous year and similar to the 2017 peak of £680,895.
With the stamp duty holiday in place, there is a saving of £15,000 on offer.
Katie Clutterbrook, a known-name in the property market in London, said; “If they can get their deposit together, low interest rates make a mortgage very often cheaper than renting. This, coupled with the stamp duty holiday and Help to Buy, means that this summer we were far busier with genuine enquiries from first-time buyers than we have been in previous summers.”
JLL’s head of residential research Nick Whitten said; “The uptake of Help to Buy in London since the lockdown is booming. First-time buyers are aware that it will be phased out in a few years and that the stamp duty holiday ends in March. They think there is a small window in which to buy.”
The Inner London boroughs are classed as:
- Hammersmith and Fulham
- Royal Borough of Kensington and Chelsea
- Tower Hamlets
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