Fitzrovia Property Market – Post Election Blues?

With the election now over and the stability of Downing Street secure, with David Cameron and his Blue Tories as the largest party in Westminster, in Fitzrovia (as in the rest of the UK) average wages are beginning to grow faster than inflation. This is good news for the Fitzrovia housing market, as some buyers may be willing or able to pay higher prices given the more certain political outlook and attractive inexpensive mortgage rates. However, sellers who think they have the upper hand due to the lack of property for sale should be aware that we should start to see an increase in the number of people putting their properties on to the market in Fitzrovia giving buyers some extra negotiating power.

At the last election in May 2010, there were 146 properties for sale in Fitzrovia and by October 2010, this had risen to 220, an impressive rise of 51% in five months. An increase in the supply of properties coming on to the market could tip the balance in the demand and supply economics seesaw, thus potentially denting prices. However, as most sellers are buyers and confidence is high, this means there will be good levels of property and buyers, well into the summer, as demand will continue to slightly outstrip supply.

Just before we leave the run up to the election, it is important to consider what the uncertainty in April did to the Fitzrovia property market. I mentioned a few weeks ago that property values (ie what properties were actually selling for) had risen by 0.8% in March 2015. Now new data has been released from Rightmove about April’s asking prices of property in Fitzrovia area. It shows that pre-election nerves never coming home to roost in the final weeks of electioneering, with the average price of property coming to market decreasing by a very modest 2.3%.

I am sure our local MP’s, Keir Starmer and Mark Field, would agree that the biggest issue is the lack of new properties being built in Fitzrovia. The Conservative manifesto pledged to build 200,000 discounted starter homes for first-time buyers in the next five years. For Fitzrovia to gets its share, that would mean only 10 such properties being built in Fitzrovia each year for the next five years, not much when you consider there are 5,784 properties in Fitzrovia.

Housing is not a big issue for Conservative voters and because London is an increasingly Labour city where the biggest housing issues are found by a country mile, so will it remain on the ‘to do list’ but won’t get recognition it deserves. Until another political party gets back into power, nothing will seismically change in the property market, thus demand for housing will continue to outstrip supply, meaning property values will increase (good news for landlords). However, rents tend to go up and down with tenant wages in the long term. Rents in the area are 21.49% higher than they were in 2008, but broken down, that has only been a modest rise of 3.07% a year ... so with renting everyone wins!