2016 Buyer Profiles

By on Friday, January 27th, 2017 in Market Trends.

 

2016 Buyer Profiles

Nationality
In 2016, three quarters of the buyers who purchased in our areas were British. The proportion of properties sold to British buyers rose steeply in the first half of the year and that trend continued throughout the year. At the beginning of 2015 they accounted for just 56%. The biggest retrenchment, in our experience, has been amongst Asian buyers who accounted for between 20 and 25% of buyers in 2013 and 2014 and only 6% in 2016. in 2015.

2016 Buyer ProfilesAge
The age distribution of buyers is relatively constant with the under 30s making up less than 10% and the 30- 50s making up around 90% of the total. The balance between those in their 30s and those in their 40s seems not to exhibit a very distinct pattern. The City is the exception with a significantly older age profile than our other markets. Bloomsbury is strongly influenced by its student population.

2016 Buyer ProfilesBuyer Type
There was a significant swing in the buyer intention data for 2016, with a notable increase in first time buyers from less than 10% of buyers

to 22% in 2016 and a compensating reduction in the proportion of buy to let purchasers from around 30% or more to just under than 20%. Perhaps this illustrates that government policy has had some impact even in our high value markets to encourage more people on to the housing ladder – interesting though that there was no corresponding fall in the age profile, suggesting that first time buyers are not the under 30s but fall solidly within the 30-40 age bands.

2016 Buyer ProfilesFunding
28% of buyers in 2016 funded their purchase with no debt and a further 15% were able to put more than 50% down as equity. The cash-only buyers were more prevalent in 2013-4 but nevertheless they remain a significant proportion of the buyers in our markets, reinforcing the point that we often make about the resilience of owners in these markets. They are not generally exposed to high gearing and therefore not so vulnerable to interest rate (or tax) rises on buy to let mortgages.

Comparing submarkets

These charts illustrate averages across all our areas but there are some sharp distinctions between the submarkets. For instance, while 28% of buyers funded their purchases with 100% cash across all markets, the proportion was 50% in Midtown and just 10% in East London.

First time buyers on the other hand were far more prevalent in East London where they accounted for 24% of the total compared with 17% in Midtown and just 8% in the City. A third of all buyers in Midtown were buy to let investors compared to 21% in East London.

2016 Buyer Profiles
2016 Buyer Profiles

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