Leading South London estate agents KALMARs have reported that strong domestic Help to Buy purchases, high demand from international buyers for land and a buoyant lettings market are boosting the South London property market despite ongoing Brexit uncertainty.
Revealed in their latest Q3 market review, KALMARs have led a number of high-profile residential and commercial deals since the start of the year, with over £55 million of residential transactions achieved in just nine months. In addition, using their extensive local knowledge, KALMARs have monopolised the South Bank office sales market, representing three times more offices for sale in August than any other agent.
For the residential sales market, KALMARs report an increased activity level with the number of enquiries and instructions steadily rising, as some buyers no longer want to wait for Brexit clarity. Character properties, homes available with the Help to Buy Government loan and homes near excellent transport links remain very popular. KALMARs advise that key hotspots for investment are Canada Water, Rotherhithe and North Greenwich, with rental yields in these areas achieving up to 5%.
The new homes market in South London has seen continued activity, with KALMARs successfully selling a number of schemes following high domestic demand with buyers using the Help to Buy scheme. In recent months, KALMARs has sold 7 of the 8 apartments at Lordship House in Dulwich, all four apartments at Webber Street in Southwark, and several units at the newly-launched St James’ Road, Bermondsey. In addition, KALMARs note that Old Kent Road continues to be a key focus for investors, as developers look to capitalise on the area’s extensive regeneration plan.
For development opportunities, international buyers, particularly from China, continue to capitalise on the weak pound and are making considerable land purchases. KALMARs have recently secured significant deals to housing associations, hotels and investors in student accommodation.
The residential lettings market has continued to perform very strongly, with the average rental prices rising in SE1, SE16 and SE17 due to ongoing demand. For Bermondsey and Rotherhithe Village, renters can find good value for money and can typically expect to pay £450 per week for a one-bedroom apartment, rising to £700 per week for a three-bedroom apartment. Recent successful letting deals secured by KALMARs include properties on Magdalen Street and Bermondsey Street.
As the total amount of office space available has decreased, KALMARs have seen the average annual asking rents for central SE1 offices increase to £52.05 per square foot, with companies in the creative and technology sectors dominating both enquiries and lettings. The decentralised office market is growing, as businesses seek co-working spaces and serviced offices with lifestyle amenities, with locations including Vauxhall, Oval, Camberwell and Peckham proving popular.
KALMARs also have expertise in the retail and industrial market, where the average asking price and occupier demand is varied. For Retail units, the ‘experience’ element is essential, with a growing demographic being shops that offer experiences or products that cannot be bought online, such as yoga studios or nail and hair salons. A two-tier market has been created, with prices in Deptford up to £20 per sq. ft. compared to prices in London Bridge of up to £200 per sq. ft. For the industrial market, a significant amount of South London stock has been lost as sites sell for redevelopment, and many sites are available on short leases as owners have long-term development plans. Although rents have lowered, KALMARs note that an industrial occupier can still acquire five-year leases in Charlton and Greenwich.
Richard Kalmar, Managing Director at KALMARs said, “Although Brexit uncertainty is still affecting the market, the South London residential property market has been boosted in recent months by ongoing domestic purchases using the Help to Buy scheme and a strong lettings market. International buyers are also looking to capitalise on the weak pound to make significant land purchases with long-term development plans. At KALMARs we believe that an end to Brexit uncertainty will provide a much-needed boost to the property market, but it is testament to London that the market has remained relatively stable despite challenging circumstances.”
Leave a Comment