Average prices in prime central London property market down 1.1% in year to February
Average prices in central London’s prime property market fell by 1.1% in the year to February 2018 as stamp duty and political uncertainty continued to affect the sector, the latest analysis suggests.
The average asking price reduction between £1 million and £5 million was 9.9% over the 12 month period and at the same time the supply listed for sale was 5.4% higher, according to the index report from Knight Frank.
Despite stamp duty and Brexit causing caution for buyers and sellers, they are sensing that the market is more stable, said Tom Bill, head of London residential research at Knight Frank, even although prices are still 8% below their previous peak in August 2015.
As pricing in prime central London has stabilised, so have trading volumes, the report also reveals. There was a 2% increase in sales volumes in the year to February 2018 compared to the previous 12 month period, LonRes data shows.
‘While the market remains sensitive to political events there currently appears to be a sense of relative stability being restored The impact of stamp duty has been substantially absorbed and is now an accepted cost of transacting,’ said Bill.
‘Indeed, an analysis of asking price reductions over the last year shows pricing has more than adjusted to take higher transaction costs into account. This over compensation suggests the market has also undergone a process of self-correction following the bull market run between 2009 and 2014,’ he explained.
There is evidence that property owners are responding to the fact pricing and sales volumes are bottoming out, the report suggests. The number of properties listed for sale in prime central London was 5.4% higher in February 2018 than the same month last year, Rightmove data shows.
But Bill does not believe the sales market is poised to enter a strong upswing in terms of pricing or trading volumes. Political uncertainty surrounding the Brexit process and the finely balanced arithmetic in Parliament is providing continued grounds for caution,’ he added.