The London property market has recently seen a major boom. The reason for this is the increasing demand for student apartments, which started with a delay this year due to the Corona crisis.
In times of the Corona crisis, many people shy away from making important purchase decisions. As a result of the fall in demand, London saw the largest price declines since the financial crisis of 2008/2009. According to the international real estate consultancy Knight Frank, the average rental prices in Prime Central London fell by 5.8 percent in the twelve months to July 2020, and by 5.4 percent in Prime Outside London.
But it was not just the insecurity of the people at this unfamiliar time that initially dampened real estate demand in the second quarter. According to the FAZ, the British government’s political measures also made it more difficult for London real estate agents to buy and sell real estate, as viewing apartments were strictly prohibited in March.
According to Knight Frank, all these factors ultimately led to the demand for real estate in London falling significantly in the second quarter. According to the agency, the number of potential customers who announced themselves in the week of July 11th fell by almost 26 percent compared to the previous year. In the summer, the total number of leases concluded in London was also almost a third lower than in the previous year.
But it currently looks like better times will come for the industry again. The real estate agency Knight Frank recently reported a surprisingly positive development for the rental market in the British capital: In the week leading up to August 22, the number of viewings in London and the Home Counties reached a ten-year high. According to Tom Bill, real estate expert at Knight Frank, this is due to the unusual activity patterns of customers when buying real estate, which differ significantly from the normal seasonal highs and lows in demand in an ordinary financial year.
According to the real estate agency, a quarter of the entire London property market is made up of students. Especially at the beginning of the pandemic, they were often not sure how the next semester at the university would be. International students also hesitated to start studying abroad at the beginning of the Corona crisis. This is confirmed by surveys by IDP Connect, an organization that places students at universities around the world: According to the IDP survey results, in April only 69 percent of international students were ready to complete their studies despite the impending travel restrictions and stricter quarantine rules another country to begin with. In July, however, it was again 74 percent.
Above all, the increasing confidence of international students and the delay in making decisions until the end of August recently led to a huge increase in demand for real estate in London, according to Knight Frank. According to the information, the total number of leases concluded in the week of August 22nd increased by 17 percent compared to the previous year. This development has made London real estate agents a little more confident that the property market will strengthen and prices will rise again.
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