Peer-to-peer property lender, CapitalRise, is positive on London prime property despite challenging market conditions
CapitalRise says London’s prime property market is in good shape in spite of challenging macroeconomic conditions.
The peer-to-peer property lender, which specialises in prime property in London and the South East, said it had assessed over £1.88bn of deals over the first six months of 2019.
CapitalRise highlighted improving investor sentiment in the market despite the dual uncertainties of Brexit and the US-China trade war.
The firm said completions on property loans in upmarket Chelsea and Belgravia pointed to ongoing positive interest from multinational investors.
Prime property remains attractive to liquid international buyers who hold long term views on London retaining its status as a world city and safe haven, CapitalRise said in a blog post on its website.
It said that the weakening of sterling against major currencies has improved this attractiveness, particularly for those purchasing in US dollars.
Citing research from London estate agent Chestertons, the lender noted that prices in the capital’s high value locations had fallen by just 0.3 per cent in the first three months of 2019, compared to a 1.2 per cent slump in the previous quarter.
Chestertons’ London Residential Report for Spring 2019 added that the estate agent “has seen an increase in buyer activity in high-end locations despite concerns about Brexit” and that offers submitted on properties in prime sites were trending higher.
While instructions fell by 20 per cent in the first quarter of 2019 compared to the same period in 2018, the number of applicants was 36.5 per cent higher, it said.
It added it expects that once Britain’s exit from the European Union is completed, “there is potential for a stronger bounce back as more pent-up demand is released.”
Looking ahead, CapitalRise pointed to price forecasts rising by over 12 per cent in London’s prime property market over the next five years. FTSE 250-listed estate agent Savills noted in its most recent projections that prices could lift by six per cent by 2021 after flat growth across 2019 and 2020.
CapitalRise have the same market outlook, which is why they are increasingly funding well-resourced developers and investors who are making opportunistic investments and looking to capitalise on the forecast upswing post-Brexit, the firm said.
