Sales:
Laurence Glynne, Partner at LDG, comments:
"The significant trend in this year's sales market has been the increased activity towards the higher end of our market - our average single sale price in 2009/2010 was £839,000, whereas this year, (2010/2011), it was £1.231m - a minimum increase of 5%.
"We believe that this is because finance to purchasers who would usually buy in the £350,000 - £750,000 price bracket has been much harder to obtain as the banks have restricted buy to let packages (which is slowly changing) and lending to first time buyers, whereas wealthy buyers are still keen to purchase prime residential flats and houses.
"Our figures support this; the number of cash buyers is currently averaging at 64% (compared to 44% in 2009/2010) whilst financed transactions have accounted for 35%.
"The number of UK based purchasers has increased from 48% to 70% year on year, whilst the number of EU purchasers increased from 11% to 17% - this is hardly surprising as the recent financial crises in Europe has led to an increase in people wanting to invest their money in London rather than European markets.
"Interestingly, the number of purchasers from the rest of the world has gone down from 40% to 13% year on year, this may be because there was less new build property - which tends to attract foreign investment - to purchase in the West End this year.
"The consistent major shortage of properties for sale continues as it has done for several years, therefore stimulating price increases which we have seen running at an average of 5% but in some cases, as much as 10%.
"The scarcity has meant that the most appealing units have created sealed bids and whilst the shortage continues, this could still prevail, albeit more cautiously in the current global financial climate.
"We have achieved record prices in favoured West End apartment buildings, particularly Fitzrovia and Soho.
"For example, at Stirling Court in Soho, we achieved £1,225 per sq ft compared to £1,050 sq ft the year before on the same property, and in excess of £1,300 per sq ft at Rathbone Lofts in Fitzrovia compared to £831 per sq ft for a modernized luxury mansion flat in the same vicinity a year before.
"The year ahead will continue to reflect the shortage of available flats and houses for sale, and as such, we expect prices to continue to steadily increase.
"We also anticipate an influx of purchasers from Europe, the Far East and others continents based on the strength of the London property market.
"Not only that, but theatre, arts and the cultural energy in the West End have a significance in attracting people to property in the capital, whether for their primary residence, investment or renting."
Lettings:
Javier Carrillo, partner and lettings manager, comments:
"This year has seen an increase in the volume of lettings to students due to the proposed increase in University fees next year - 50% of our tenancies are to students and the academia.
"We have also increased the number of lets to individual and corporate tenants by 20%, particularly in 1-2 bedroom flats in the mid-market where there is very low stock.
"Because of recent redundancies in the City, there has been a drop in the number of professional sharers, so more people are seeking one bedroom properties as a result.
"Our renewals have increased by 40% highlighting three factors; firstly, the increase in achievable rents (10-15%) making tenants stay longer, secondly, the lack of stock in the sales market, and thirdly, the difficulty obtaining finance which has discouraged the starting level for purchasing.
"This mainly applies to the one and two bedroom flats, whereas the larger flats and houses have been much steadier.
"We see no sign of renewals reducing in the coming year, because of the global economy and international finance situation in Europe and elsewhere.
"Whilst London remains the financial centre of the world and is seen as one of the safest havens for city living, this will bode well for landlords investing.
"The indications are that there will be high demand for serviced letting apartments during the London 2012 Olympics, and for minimum three month tenancies, in certain instances.
"Whilst people want to maximize the leverage that the Olympics potentially offers, only in a very small number of cases will people substantially financially benefit."
Commercial:
Daniel Castle, Partner and head of commercial at LDG:
"The general West End and good fringe location office market will continue to show steady rental growth and reduced tenants' incentives due to the limited supply of prime office stock, with demand remaining strong across the board.
"The investment market will especially thrive due to the sustained influx of foreign investors who continue to view central London property as a safe haven, bearing in mind the turbulence within the world financial markets.
"Demand from end user owner occupiers wishing to purchase remains high, albeit they will struggle to compete with investors.
"The trend for residential conversions from commercial space will remain very much en vogue with the residential market sustained upward growth."
