savills elmbridge home truths
TRANSCRIPT
1
Savills Elmbridge
Home Truths
Tuesday 22 September 2020
Welcome and thank you for joining.
You are on mute for the duration of the webinar.
We will begin shortly.
2
Welcome
Simon Ashwell
Head of Weybridge and
North Surrey Residential
01932 838 004
Frances Clacy
Residential
Research
020 7409 5905
Charlotte Baylis
Head of Esher
Lettings
01372 461 907
Andrew Perratt
Head of Country
Residential
020 7016 3823
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Q&A Panelists
Trevor Kearney
Country House Department
020 7409 8872
Louis Winterbourne
Head of Cobham office
01932 586 200
Karl Matier
Head of
Esher office
01372 461 903
Source: Savills Research 5
What differentiates the current situation from previous downturns?
House price growth in the run up to the
crisis has been modest
Furlough scheme and
mortgage holidays have
protected homeowners and buyers
Expectation of a v-shaped
downturn and recovery (albeit
a deep & possibly
lopsided one)
Interest rates are at an
unprecedented low, but LTVs
have tightened
Source: Oxford Economics 6
The economic outlook - GDP
Sharp economic contraction in
H1 2020
Unemployment to rise, but still lower
than post-GFC
Interest rates lower for longer-15%
-10%
-5%
0%
5%
10%
15%
Ann
ua
l re
al G
DP
gro
wth
-10%Q4 2020
+11%Q1 2022
Source: Oxford Economics 7
The economic outlook - unemployment
Sharp economic contraction in
H1 2020
Unemployment to rise, but still
lower than post-GFC
Interest rates lower for longer0%
1%
2%
3%
4%
5%
6%
7%
Une
mplo
ym
en
t ra
te, IL
O d
efinitio
n
4.0%Q1 2023
6.5%Q4 2020
Source: Oxford Economics 8
The economic outlook – base rate
Sharp economic contraction in
H1 2020
Unemployment to rise, but still lower
than post-GFC
Interest rates lower for longer0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
Base r
ate
0.1%Until
Q2 2024
Source: Savills Research using TwentyCi 9
Strong bounce back at the top end
88%
103%91%
112% 111%
132%
91%
26%37%
132%
195%
227%
0%
50%
100%
150%
200%
250%
Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
v s
am
e m
onth
last yea
r
Properties marked as Sold Subject to Contract
Whole Market £1m+
Source: Savills Client Survey August 2020 10
Lockdown has driven a change in buyer requirements
56%
more inclined to work from
home in the future
66%
of those anticipate that they will do so for 3+ days a
week
57%
said a separate space to work from home had become more
important
48%
said accessibility to
Wi-Fi had become more
important
62%
said the amount of garden or
outside space had become
more important (80% of the under 40s)
11Source: Savills Research using Land Registry
Local values
£782kAverage value for Elmbridge
20% £1m+ transactions
4.6%£2m+ transactions
Source: Savills prime regional index, Q2 2020 12
Prime price movements
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
An
nu
al p
rice
move
men
t
All prime UK (excluding London) Cobham, Esher & Weybridge
Source: Savills prime regional index, Q2 2020 13
Prime price movements
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
An
nu
al p
rice
move
men
t
All prime UK (excluding London) Cobham, Esher & Weybridge
Source: Savills prime regional index, Q2 2020 14
Prime price movements
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
An
nu
al p
rice
move
men
t
All prime UK (excluding London) Cobham, Esher & Weybridge
Annual
growth
+0.6%All prime UK
(excluding London)
+2.3%Prime Cobham, Esher &
Weybridge
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Cobham, Esher &
Weybridge
-5.2%Since 2014 SDLT change
Cobham, Esher &
Weybridge
£1.5m+
-12.0%Since 2014 SDLT change
Source: Savills prime regional index, Q2 2020
Source: Savills using Land Registry 16
But what of the SDLT holiday?
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Pote
ntial sta
mp d
uty
savin
gs,
as a
% o
f pu
rcha
se p
rice
Purchase price
FTB saving as a % of purchase price Other saving as a % of purchase price
Source: Savills Research 17
Looking forward
Buyers and sellers will need to remain pragmatic1
• Unwinding of government support & Brexit will make it difficult to sustain
current momentum2
• The easing of international travel restrictions is particularly important for certain
markets3
• Mortgage debt remains incredibly cheap but is proving difficult to access4
• The wider tax environment may act as a drag on future price growth5
Source: Savills Research 18
And for the prime rental markets across the commuter zone
Increased tax &
regulation
More try before you buy tenants
Demand for best in class
Low stock levels
Strong demand for family houses
Tenants seeking more space
Lower levels of corporate demand
More demand from Londoners
19
Cobham, Esher &
Weybridge rents
+0.3%Quarterly
Cobham, Esher &
Weybridge rents
-1.3%Annual
Source: Savills prime regional lettings index, Q2 2020
22
Our market
Buyer registrations
+102%
Buyers from London
+152%
Viewings arranged
+81%
Sales agreed
+117%
New Instructions
+411%
Source: Savills data August 2019 v August 2020
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Our market 2020
96% of guide price achieved (same pre &
post lockdown)
Buyers with London postcode rose from
27% pre-lockdown to a staggering 68%
post-lockdown
Number of sales in St George’s Hill up 63%
compared to the same time last year
In 2020 Cobham office sold 19% more
property valued below £1.75m than in 2019
54% of our sales generated multiple offers
Esher office arranged an incredible 188%
more sale in August 2020 than the previous
year
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Orchard Gate, Esher: Guide £1.45 million
Launched 7th Sept
9 viewings booked in three days
Sale agreed in excess of asking price
Client was able to secure their onward purchase
Birds Hill Rise, Crown Estate: Guide £3.95 million
Local buyer
Sold off market prior to build completion
25
The pull of the Private Estate
Ashley Park
Guide £3.45m – Competitive bidding
London v Local
Burwood Park
Guide £4.45m – Competitive bidding
International v Local
Burwood Park
Guide £4.95m – Competitive bidding
London v Local
St. George’s Hill
Guide £3m – Competitive bidding
London v Local
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The pull of the Private Estate
Burwood Park
Guide £1.85m – Esher buyer
Southfield Place
Guide £1.05m – Weybridge buyer
Ashley Park
Guide £1.45m – Walton buyer
St. George’s Hill
Guide £2.15m – Cobham buyer
Source: Savills 27
What does £1m buy you in…..
Weybridge
Wootton Cottage
4 bed detached
1,735 sqft
£605 psf
Vincent Road
3 bed detached
1,607 sqft
£653 psf
Cobham
Esher
Grapes House
4 bed terrace
1,885 sqft
£581 psf
London SW1
Moore House
1 bed flat
758 sqft
£ 1,385 psf
The power of competition
Mizen Close, Cobham Garden Cottage, Leatherhead The Grange, Walton on Thames
Sold before formal launch of marketing campaign
Offer agreed in excess of the guide price
Guide £1.695 million
Sold within 10 days of launching onto the market
4 buyers offered
Sealed bids
Sold in excess of the guide price
Guide £1.695 million
Launched on Thursday
16 viewings on Saturday
8 offers
Sealed bids
Sold in excess of the guide price
Guide price £1.050 million
28Source: Savills
54% of sales were the result of multiple offers.
Source: Savills 29
Is it all good news?
Number of apartments for sale
Weybridge 281
Walton on Thames 207
In total 1,552 with 3 miles of Weybridge High Street
Best in class will sell
30
Summary Buyer demand started rising January 2020
Pent up demand with London families
moving out rose sharply after lockdown
Gardens, privacy and office space key
Less need for easy commuting
Access to schools important
St George’s Hill slowly recovering as
available stock level decreases
The market so far
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March – September (2019 vs 2020)
Volume of new applicant registrations (+47%) Volume of viewings (+14%)
Number of Relocations from London (+18.5%) Average Asking Price of Deals (13.6%)
Number of Corporate searches (-50%)
Minor Trends/Points of Interest
• Rent reductions and Country Retreat demand
• Incredible appetite to move at the earliest opportunity (video viewings)
• New or recently refurbished homes most desired
• Demand outweighing supply across all price points
• Most competitive price point has been family homes sub £3,500 pcm
• London movers bolstering less corporate demand
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lll 66
66 4
Looking forward
Size is Key
Flexibility
Best in Class Pet-Friendly
Stock LevelsCorporate Services