Overseas sales volumes rose somewhat during Q3 2019, Build to Rent schemes are becoming much rarer than just a few years ago and Help to Buy is motoring steadily but not roaring away.

We estimate that overseas sales, BTR and Help to Buy were responsible for two thirds of the 5,150 sales in London during the last three months.

Political unrest in Hong Kong is providing willing buyers for overseas launches. We are told the buyers are both Hong Kong residents (who prefer completed stock) and residents of the mainland with wealth held in Hong Kong (who apparently prefer off plan stock). Depending where you start measuring, the pound is 15% cheaper than it was a year or two ago, and could rise if and when Brexit is resolved.

After several years waiting for Inner London values to recover, volume builders, wanting to get a move on with schemes, are being pragmatic about discounts. The combination of willing buyers and willing sellers makes for successful overseas launches. However not just any old stock will sell, it’s got to be a solid product at a price that offers good value. If developers cut corners on quality or push the pricing, sales falter.

Build to Rent in the capital is a dwindling marketplace. Construction starts are down, and new activity is dominated by a few big schemes. Buyers of BTR stock are very precise in terms of what they want and the returns they need. London is currently less able to accommodate the big funds’ needs than regional cities. Hence the flurry of press releases about BTR in places like Bristol, Manchester and Leeds.

It is very surprising that we didn’t find more bulk (non-BTR) deals during our quarterly research. We understand there is no shortage of bulk units being offered for sale by smaller developers with expensive funding.

At the very top end of the market there is a sense that availability is shrinking, that prices have perhaps bottomed out and could even be recovering. We are told buyers can now see value, and are fed up with waiting for Brexit or a general election.

In Zone 2, sales rates are twice the level of construction starts and this makes for a rapidly improving risk profile.