The four months from March to June 2009 witnessed an unexpected increase in confidence and optimism amongst buyers and a renewed willingness to sell amongst vendors. In the second half of 2008, we reported that the sales market in Midtown, City and Docklands was characterised by falling prices and a historically low level of transactions. We pointed out, however, that the rate at which prices were falling decelerated in the second half of 2008 compared to the first half of the year.

In broad terms, the market continued in this vein in January and February 2009: sales activity was moribund. There was evidence, however, in Midtown, City and Docklands that prices had stabilised at the beginning of the year, albeit the limited number of transactions meant that evidence was thin and inconclusive.

From the beginning of March, however, the sales market experienced a dramatic recovery. March 2009 was the first month since May 2008 that our website received more visits to sales than lettings pages. The recovery, which involved a higher volume of sales, fed through to price increases in Midtown and the City and maintained stable prices in Docklands. The increase in sales and prices affected all price-bands of residential property up to £1 million (for property priced at over £1 million, sales remained difficult to achieve). Our overall view is that prices for a typical one-bedroom flat across Midtown, City and Docklands increased marginally by 3% in the first half of 2009

It is important to emphasise that the banks have had little impact on this recovery in both sentiment and sales transactions. The market was created by purchasers with either very low loan to value ratios or “100% cash buyers”, as the banks had yet to re-enter the business of granting mortgages. Over 70 % of our sales in the first half of 2009 were to cash buyers. Investors were absent from the market, allowing us the pleasure of selling finished flats of high quality to owner-occupiers, most of whom were working locally.

Foreign buyers, especially from the Euro Zone were strongly evident in Midtown, City and Docklands, buying apartments for owneroccupation close to their workplace. Price falls of between 13% in Midtown and 20% in Docklands from September 2007, combined with the movement in the exchange rate from €1:£0.80 in October 2008 to near parity at the end of December 2008, generated enhanced “discount” for Euro Zone buyers. The Financial Times termed it “Half-price London”. In recognition of the enhanced level of interest from Euro Zone buyers, Hurford Salvi Carr added a page to its website for “Clientela Italiana” in January 2009, which enhanced our volume of sales to Italian buyers. In May and June 2009, we also saw
an increase in Far Eastern buyers from Hong Kong and Singapore where exhibitions of London property were once more being held.