Chestertons News

Research & insight article

Residential Forecasts 2014


There are strong signs that the prime London market has reached its peak in the current cycle..

Nick Barnes, Head of Research

Report Highlights

  • Signs that the prime London market reached a peak in Q3
  • Stock levels rose but buyers more cautious and less active
  • Decline in resale capital values accelerated – quarterly drop of 1.5%
  • In contrast, the new homes sector remained buoyant with price growth still in evidence

Sales Forecasts

• Supply & demand trends

London’s prime residential lettings market continued to improve during the third quarter, although conditions remained testing. Tenant demand increased, reflecting continued

employment growth and ongoing affordability issues preventing access to the sales market. Compared to the second quarter, new applicants registered rose by 29% while agreed deals were an impressive one third higher. On an annual basis, growth was less robust but still healthy: in the year to end September, new applicants registered rose by 13.5% compared to the corresponding period in 2013 while agreed deals were up 4.5%.

• New homes market remains buoyant

• Capital values have come under downwards pressure

• Outlook

Lettings Key Trends

 - New applicants and new instructions increased in third quarter

 - Prime rents recorded further marginal rise of 0.4% in Q3

 - Prime yields edged upwards to 3.1% at quarter end

 - Forecast prime London rental growth of 3% for 2015

• Supply & demand

• Rental growth

• Residential investment market

• Yields nudged upwards in Q3

• Yields

Oxford Street Article Details

Contributed by

Nick has more than 20 years’ experience within the property research arena.

Nick Barnes

Nick Barnes

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