In the second half of 2011 confidence in the residential sales and rental markets in Midtown, City of london and Docklands was maintained in spite of the continued stream of negative economic news at the national, European and global levels. Price growth was experienced in the sales market in Midtown and the City, albeit prices were pegged in Docklands by local supply and demand factors. Overall, the rate of increase in prices at 3.5% across all three markets was at around half the rate seen in the first half of 2011. In the lettings market, rents rose in all three markets in response to shortages of rental stock and continued high levels of demand. 2011 was an excellent year for the Midtown, City and Docklands markets and the strength of the market was characterised by the following factors:
Cash buyers continued to account for 50% of purchases, while other buyers with cash were able to avail of mortgage finance at low rates of interest.
• The return of the 90% mortgage improved access to the sales market for first-time-buyers.
• The volume of transactions in both the sales and rental markets increased.
• There were high renewal levels for rental stock at increased rents, reducing voids for investors/landlords.
• Demand for land for residential development, with or without planning permission, was insatiable in 2011, leading to very significant growth in land prices.
• UK housebuilders returned to the market, seeing central London as ‘safe’ place to develop.
• There was continued evidence of successful off-plan sales in new development schemes.
• Developers continued to be able to access and benefit from private equity funding in the absence of conventional bank funding.