Prime Central London House Price Growth Lowest for Five Years
There were 26% fewer homes sold for £1m or more in the prime central London market in the last 12 months.
The Land Registry data is supported by Knight Frank’s most recent prime central London sales index, which reveals that annual price growth, at 1.7%, was at its lowest level for over five years.
Without including the newest prime central London markets of Islington, Riverside, City & Fringe and Southbank, growth was at just 0.4% in the past year.
Prime Central London House Price Growth Lowest for Five Years
The Knight Frank report on prime central London sales in August states: “Demand was unsurprisingly restrained in August. It is typically one of the quieter months of the year, however, this seasonal trend was compounded by the fact that buyers have been coming to terms with higher Stamp Duty (for properties worth more than £1.1m) and uncertainty in global financial markets.”
The report also says that the market in August was particularly affected by China devaluing its currency, which has caused “some buyers to postpone decision-making until there is a greater sense of certainty.”
However, it adds: “On the other hand, there is evidence Chinese buyers have stepped up their interest in safe haven global property markets like London and are increasingly looking for homes in golden postcode neighbourhoods like Mayfair.”
The annual price growth of 1.7% is the lowest increase since November 2009, eight months after the market bounced back from its post-Lehman Brothers low.
But the report is optimistic: “The seasonal nature of the market dictates buyers will become more active in the autumn and a greater sense of normality will return to the market, which will also be driven by the fact vendors are lining up new properties for sale.”1
Tom Middleditch, an associate director at JLL Kensington, comments: “Pre-election weakness affected both the sales and lettings market, but this was reversed with the Conservative Party win.
“Although transactions were not quite at the euphoric levels that some agents reported in the immediate election aftermath, prime markets are now rebuilding stock levels and should find moderate activity growth in Q3.
“However, the lack of sales stock continued to push occupiers into rental property. This was particularly notable for corporates who, alongside strong demand from students, pushed up new lettings by 93% in June compared with 2014.”1
1 http://www.propertyindustryeye.com/prime-central-london-price-growth-lowest-for-five-years/