London Property - Home of Super Prime

London Property Market Update 2023: Top Agents Share Year-End Predictions - Silvina Paz

December 22, 2023 London Property - Home of Super Prime Season 10 Episode 2
London Property Market Update 2023: Top Agents Share Year-End Predictions - Silvina Paz
London Property - Home of Super Prime
More Info
London Property - Home of Super Prime
London Property Market Update 2023: Top Agents Share Year-End Predictions - Silvina Paz
Dec 22, 2023 Season 10 Episode 2
London Property - Home of Super Prime

In this second episode of our latest Market Update series, host Farnaz Fazaipour welcomes Silvina Paz. With 13 years of experience in central London property, Silvina shares her perspective on the roller coaster that was 2023. While the market experienced activity at the beginning and end, the middle saw a notable quiet period, attributed to interest rate uncertainties and global geopolitical tensions.

If you have a property question, we would love to hear from you email us at ask@londonproperty.co.uk or book a free 15 minute call by texting 07860 343434.

Discussing seller and buyer mentalities, Silvina notes a mismatch in expectations. Some sellers are still holding onto pre-lockdown ambitions, while buyers, influenced by rising interest rates, are seeking discounts. This market disparity is particularly evident in areas like Knightsbridge and Belgravia, where some properties are selling below their 2013-2014 purchase prices.

The rental market, once robust, has slowed down, with tenants becoming more selective and demanding quality amenities, even in high-end properties. Silvina also observes a trend of longer-term rentals, with tenants seeking four-year leases, indicating a shift in lifestyle and expectations.

Addressing the broader market, Silvina explores the influx of American buyers and the changing dynamics of Middle Eastern buyers, now focusing on areas like Mayfair. Despite the challenges, certain areas like Mayfair, Notting Hill, and St. John's Wood maintain their appeal and stability.

Looking ahead to 2024, Silvina refrains from making concrete predictions, emphasizing the unpredictability of global events. However, she anticipates increased market activity in February-March, driven by mortgage renewals. The impact of political events, such as potential changes in the UK government and the US elections, adds an additional layer of uncertainty.

As interest rates may stabilize around 3.5-4%, Silvina believes the market will remain interesting and dynamic. While acknowledging the challenges, she sees opportunities for both buyers and sellers, urging a realistic approach to navigate the evolving landscape.

Stay tuned for our engaging conversations with the next agents as they share their perspectives, expertise, and predictions for the future of London's real estate.

Our Market Update series is designed to provide you with a comprehensive understanding of how different prime areas within London are navigating the ever-changing real estate landscape. Whether you're a buyer, seller, or investor, these episodes offer invaluable insights that can guide your decisions in the London property market.

Maximize your property wealth with London Property. Turn challenges into opportunities. With expert knowledge and reach, we tackle the complexities and inefficiencies of the property market with you.

Show Notes Transcript

In this second episode of our latest Market Update series, host Farnaz Fazaipour welcomes Silvina Paz. With 13 years of experience in central London property, Silvina shares her perspective on the roller coaster that was 2023. While the market experienced activity at the beginning and end, the middle saw a notable quiet period, attributed to interest rate uncertainties and global geopolitical tensions.

If you have a property question, we would love to hear from you email us at ask@londonproperty.co.uk or book a free 15 minute call by texting 07860 343434.

Discussing seller and buyer mentalities, Silvina notes a mismatch in expectations. Some sellers are still holding onto pre-lockdown ambitions, while buyers, influenced by rising interest rates, are seeking discounts. This market disparity is particularly evident in areas like Knightsbridge and Belgravia, where some properties are selling below their 2013-2014 purchase prices.

The rental market, once robust, has slowed down, with tenants becoming more selective and demanding quality amenities, even in high-end properties. Silvina also observes a trend of longer-term rentals, with tenants seeking four-year leases, indicating a shift in lifestyle and expectations.

Addressing the broader market, Silvina explores the influx of American buyers and the changing dynamics of Middle Eastern buyers, now focusing on areas like Mayfair. Despite the challenges, certain areas like Mayfair, Notting Hill, and St. John's Wood maintain their appeal and stability.

Looking ahead to 2024, Silvina refrains from making concrete predictions, emphasizing the unpredictability of global events. However, she anticipates increased market activity in February-March, driven by mortgage renewals. The impact of political events, such as potential changes in the UK government and the US elections, adds an additional layer of uncertainty.

As interest rates may stabilize around 3.5-4%, Silvina believes the market will remain interesting and dynamic. While acknowledging the challenges, she sees opportunities for both buyers and sellers, urging a realistic approach to navigate the evolving landscape.

Stay tuned for our engaging conversations with the next agents as they share their perspectives, expertise, and predictions for the future of London's real estate.

Our Market Update series is designed to provide you with a comprehensive understanding of how different prime areas within London are navigating the ever-changing real estate landscape. Whether you're a buyer, seller, or investor, these episodes offer invaluable insights that can guide your decisions in the London property market.

Maximize your property wealth with London Property. Turn challenges into opportunities. With expert knowledge and reach, we tackle the complexities and inefficiencies of the property market with you.

Welcome to the London property podcast, your go to source for navigating the complex and ever changing London real estate market. Our digital marketplace provides informative and educational content from industry leaders. Through podcasts and videos. We cover various aspects of the real estate experience, including buying and selling finance, law, tax construction, design, and more. Join us as we delve into the latest trends and developments in the market and gain valuable insights from our panel of experts.

Hello, and welcome to London property, the home of super prime. I'm your host Farnaz Fazaipour. And today we're welcoming Silvina Paz back to the show for our market update. Welcome back.

Thank you for joining us. Thank you for having me.

So first of all, please tell us a bit about yourself and your experience in the marketplace. Before we speak about what's happening in the market today.

I have been working in property in central London for the past 13 years. Until a month ago, my word was as a property consultant, which meant that I mostly did searches for clients to buy or rent properties. And I will occasionally also sell properties mostly on an off market basis. A month ago, I decided to join estate agent, I have joined London house. And I would think that I'm probably the only one in the market that is going on that direction. Because what we are seeing and we have continued to see in that this year is lots of agents, especially the more experienced one in the established big agencies are leaving those positions to become buying agents and some are setting up their own little boutique agency. And I am a buyer's agent has gone and become a state aid.

Well, welcome on behalf of all the state agents. So can you please tell us in your opinion, which I always find it's quite lateral the way that you look at the market. So tell us in your opinion, what you think is happening at the market at the moment and what 2023 is really been like.

I think 2023 has been a roller coaster. It was notably very active on the very beginning. And he's been active at the end. But in the middle. It was very quiet. The summer particularly was very, very quiet. And I guess we owe that to the interest rate. situation and and the uncertainties about you know, they're worse both wars. That's that's what it's been it's been a very interesting year. I think from the seller's mentalities, we are seeing that people are still stuck in their own numbers, they are still a little bit, you know, holding to wherever ambitions they had for their properties back during lockdown times. And we've seen a few that are realising Well, that's no longer the case the market has changed sellers on the buyers on the other hand are the opposite, they are very much thinking there should be discounts here and there. And so we are seeing this, you know, mismatch in the market between sellers and buyers? Of course, there are some sellers that have become more realistic. And, you know, I reckon they are some that have a mortgage that they have seen their, you know, their numbers increase in. And so if they need to sell the they need to become, you know, more solid about it.

It's interesting, what you're saying about the sellers becoming more realistic. I think the one thing that sellers always forget is how long ago did you buy this? And how much did you pay for it exact and let's just put things into perspective, or is the discount that you're actually taking from your profits? You know, in a lot of cases, some people if they've been in the market long enough, they can double their money already or more or more or more.

There are some people especially some parts of London less they ignore thing here for example, if you weren't even there for more than 15 years, most likely you generously double whatever you put into into your property, most likely maybe even triple whatever you pay for it. However, I have to say that in many cases, we are seeing now some properties in some areas Knightsbridge Belgravia. We are getting sellers. for selling below what they pay for, and this is particularly the case is view bought in 2013 2014. Because even though the prices have gone down and up during lockdown, and there is demand, we are seeing that in many cases, those prices are not at the level, they were back in 2014 uncertainty. And those people know that if they want to sell it, they will sell at a loss.

That's true. And it's a matter of you know, I was asking you a client of mine who was trying to sell a property. I said, Okay, well if we're gonna go to renting it now until the market picks on what are your outgoings? He said, I'm never gonna cover my outgoings. So let's just concentrate on making less of an outgoing for me in so waiting for the market to turn and waiting for less of an outlet. Yeah, so are you seeing any kind of trend? Even it is sporadic and weird market? But are you seeing any kind of trend? Like money coming from certain countries or people buying for certain reasons? Those?

Definitely. I mean, there is definitely more American buyers than they were before we in the last year, we've seen a huge influx of American buyers, dollar buyer, buyer? Buyers? There is also definitely I think one of the most interesting things that have happened is that the Middle East or buyers who traditionally bought in nice, rich are now only one major. This is something they may first dynamic and the mayor for public has changed and is changing. And I think at the moment, you know, they are they have lots of dollars. And so I'm not surprised they can afford to buy properties in London, but even then they are becoming very savvy to they're not just gonna buy for the sake of buying.

Mayfair has really held up its prices that it hasn't yet compared to the other little villages.

Yes, yeah. But maybe my fear is, is a market on its own is not really complete. I would think there are three areas in London in central London, they are their own bubble one is made for it. The other is Notting Hill, and the other is St. John's wort. They there is always a public for those places.

There. And you're now too. So you've spent the past 13 years being more around southwest at West London. And now you're doing more work towards Western North London. No, no,

no, I'm assuming you're still everywhere. Still everywhere.

You're getting more exposure to North London, a bit more exposure to North London and what what you find is going on over there at the moment,

the same then is it going on everywhere? Everywhere else? Yes.

And are you noticing that there's a there's a exodus of of rental investors leaving the market? No. Good. No, no, because according to the press 38% of them leaving which makes me really worry about how are we going to ever find anything to rent in London and know

by what I I am what I've noticed and I think everybody has noticed is that their rental market kind of has come down to a halt. There is like a kind of reach a certain ceiling let's say because I have a friend of mine who has a really nice flat in Belgravia their tenants left on the Fourth of July she didn't rent her flat

she was being too optimistic about her pricing know

her Bryson was good. Her expression was spot on. She got one offer and at the end that person changed her mind and then somebody else came on but they were asking renters are now becoming very picky to like up to a few months ago you know when there was nothing to write and people will take pretty much whatever. And now they come with a long list of demands.

They have a lot of expectations on quality they

and they have expectations on quality that you wouldn't have seen before in general because let's be honest, they will rental market in London is not like it. You know the quality is not really that great for many, many years. The landlord's here have gotten way with murder some some properties are like, you know people they don't care. They'd say, Oh, it's a rental as if you know, but it's a lot of money for most people, even very rich people. It's a lot of money and they want some When in exchange for their money, so if the property is expensive, and for most people, the properties in central London are expensive. They want things in return. So before it was normal not to have aircon but now people even if they pay 5000 pounds a week, well guess what? They want an aircon in the master bedroom because London is hot. Now, it wasn't. But things have changed. Yeah,

no, I couldn't agree more. And also people are renting for way longer lifestyle. So they want their homes to be of a certain quality.

Yeah, I actually got an inquiry on Friday of someone who is looking for a rental property, then they want to run for four years, and they are having trouble finding somewhere because most people don't want to rent that long. They have hopes that they're gonna sell it or you know, something like that. And and this person is saying, Well, I don't want to buy I just want to rent. Can't find anything. Yeah.

Well, we'll talk about that off camera. Yeah.

That's right. Yeah, that's what I was thinking of you this morning. And that 845 I am there and I'm seeing Okay, after nine I'm gonna go after I have a Cofield call for us to talk about this. Five minutes later, I grabbed my phone, I have a message from her I'm labelled.

And that's the second time this happened in three weeks. He's incredible. She was texting me while I was texting her at the same time.

So know that I think, you know, the, the market is in a very interesting place at the moment in both the sales and the rental market. And in the sales, we are seeing that all agents, all the agents are saying, oh, gosh, next year labour is coming. And so the big, big bad wolf is coming to doubt. So you know, you should put your property on the market and sell it and so on and so forth. And then you have buyers that are practical, and they go like, you know what, if I can afford now I'll go now? If not, I'll wait because mortgages have stabilised actually some of them are coming down. So, you know, it's a good time, provided that the seller is realistic about what they what they're selling, right.

But also I find that buyers, you know, when when they hear lots of bad press, yes, then they all become property experts, and they're waiting for the market to crash. And you know, some bankers have been waiting for the market to crash for 25 years, but the current buyers you know, they're waiting for the market to crash or there's gonna come down and they know better and they're gonna wait but I actually think it's not gonna go any lower

their market is no gonna crash. I don't think so. One thing that experience shows and if you've been around for a little while, you know, this, we already have the real big crisis here which are this several increases and changes to on duty, which is the biggest tampering element in the property market. If we didn't have this the property market will be very, very different. It will be far more dynamic. But what is going to happen is gonna we're gonna go back to 2018 2019 the the market prices crash then no, there was very little stock, there will be more of market properties. And there will be very little stock and if people get the bores, or they need to move away, or they die, they will sell but if not, there isn't really a reason to sell they will stay bought and that is a fact

and wait a lot of people can afford yes to hold on wait,

I read I read a few months ago that in rbkc 67% of the properties had no mortgage. No. So if if almost three quarters of your market is not you know relate there is no link to the mortgage market then he cannot crash.

Very good point. And that

third that is less that is more you know that is exposed to the mortgage market. I doubt very much that there are big exposures to it. Yes, of course there are people that two years ago or 2% 1% were a big time and maybe now they have an issue and they need to sell but it will be a minority. It won't be a majority and that will happen very quickly because when they need to remortgage is next year and they will need to sell or they will need to Come up with some sort of idea to, you know, ride that until things stabilise. But it won't be, you know, a flooding of the market, because people need to sell all of this and all prices crash, and people are gonna just hold because at the end of the day, we all need a place to leave.

Now, no, I couldn't agree more. And I think that, you know, the people who are affected by by the mortgage also, unless they really get pushed into a corner, a lot of people are just holding their breath. Yeah. And waiting. Yes, because you know, there is light at the end of the tunnel, and you can see it with the mortgage products, they're becoming more affordable or longer terms lower deposit. So, you know, the rescue package is on its way.

I think so. And, you know, most people fear labour coming into market. And I have I, I am no fun of any Labour government, I want to make this very clear. But I do have a memory. And I remember that the last good property market we all live in this country was under Tony Blair's government. And Tony Blair was labour and Tony Blair is behind the current labour people, candidate. So I'm not too sure that we are going to see all this bad news about, you know, about people fear in the labour market, because at the end of the day, the UK needs to attract investment. And it's, you know, at a disadvantage, versus Italy, Spain, Portugal, Portugal, no longer but versus the France, even France now has done a special tax deals for people. So if France has managed to do this, why we are losing people to those countries, they need to do something to attract that and attract more investment. So I'm not so sure they're going to, you know, continue tampering with the property market, because they know it brings a lot of benefits to the economy.

But they seem to be making changes in the business world. So let's hope that that's gonna trickle down. But you know, I'm, I never believed that it's a person or a government. Yeah, just think we go through cycles, you know, you're in an upcycled down cycle, and whoever happens to be there is going to get the credit or not get the credit. Yeah, you know, it's not like, oh, so and so Keynes, everything went wrong. No. So and So came at a time in a cycle where things were changing. And yes, he's going to get the egg on his face. Before we say goodbye. And and thank you for joining us. Again, I'm going to ask you, if you had a crystal ball, what is happening in 2024.

If I had a crystal ball, I will not read any of these research that all the big agencies are publishing because in my experience, they're always wrong. I'm not saying the properties market, the property prices are going to crash or they're going to go up or down. Nobody knows what is going to happen. Because the reality is, as we have seen, there are lots of things happening in the world. Nobody has control on what's going on. Next year, we have not just labour or potentially labour here, we also have the American elections. And that has an impact too. Because in a market like London, where lots of the buyers are dollar base, whatever happened to the dollars has an impact on them, and eventually their purchasing power or the desire to buy something. So I don't know what's going to happen. But I know it's gonna be a very interesting year.

It's got to be busier than 2023. You got to have that much of a crystal ball, please.

I don't know, I think we are gonna see a lot of action. We probably well, now it's very quiet until February, and then we're gonna see a lot, a lot of action. Somebody told me, a mortgage broker told me that there is a big chunk of these mortgages that they renew in April in February, March. So if we see some sort of movement, it should be around that time of the year. The people that need to sell or need to do something. Right. So I'm hoping there and then we get the summer market that is always busy anyway. And then we'll see. We'll see what happens. We

do these news bulletins every Tuesday. So in preparation, I read a lot of news every week. And recently there was something saying that interest rates are probably going to come down around me

But it's never gonna go back to 2%. I mean, no, no, never, you never know this, but in the foreseeable future is not gonna go down to 2% is gonna sterilise somewhere around three and a half 375 or something like that, which means that, you know, we are going to be around 4%, which was traditionally who was always, you know, the cause of a mortgage.

Yeah, 5% was good deal when I was buying. Yeah, exactly. Brilliant. Well, thank you very much for joining us, and we look forward to inviting you back to the show again in the near future.

Thank you. Thanks for tuning into our latest episode of the London property podcast. Head over to our website where you can browse our exclusive network of top experts driving the market. As a member, you'll have direct access to our experts and their networks. Our award winning content will help you choose the right professionals for your needs, and make informed decisions about your investments. personal recommendations are a powerful tool in connecting with trusted professionals. Let us introduce you to the right people to help you achieve your real estate goals. Contact us now to learn more about becoming a member and gaining access to these valuable resources or joining our directory of experts.