Prime property decline in London slowing, with market recovering in West and South West
Prime property prices in London have returned to 2013 levels, falling by 12% from their peak in 2014 but the decline is slowing, down just 0.3% in the third quarter of this year compared with 2016.
Sales have remained resilient and in effect the market in the £1 million to £10 million price range is delivering buyers an effective ‘discount’ on average of 9.9%, according to a new prime property index from bank Coutts.
Overall the number of prime properties sold increased by 21% in the third quarter of 2016 compared to the same period last year but buyer appetites for properties under £1 million still lacks momentum.
The index report suggests that it changes to buy to let rules that are denting this sub £1 million market bit tax changes for landlords the key driver of this trend while stamp duty change has affected the market above £1 million.
Looking forward, the bank expect prices across the prime London property market to remain broadly flat over the short term whilst Brexit uncertainties remain.
The index shows that the market in North London has been mixed with Hampstead and Highgate not seeing the same price fluctuations recorded in King’s Cross, Islington, St John’s Wood, Regents Park and Primrose Hill.
The average discount in Hampstead and Highgate is 8% in the £1 million to £2 million bracket compared with 11.4% in St John’s Wood, Regent’s Park and Primrose Hill in the £2 million to £5 million bracket.
Central London has seen the most pronounced price fluctuations over the last four years with values in Mayfair and St James down 25.4% since the peak in the fourth quarter of 2013 and a more recent trough in the second quarter of this year.
Fitzrovia and Marylebone have performed relatively well compared to other areas within prime central London with prime property prices up 31.2% since 2013, and 4.6% compared to the third quarter of last year.
The index shows that Marylebone continues to see overspill from Mayfair and the area also benefited from regeneration close to Tottenham Court Road and the new Elizabeth line which opens in December next year along with new boutique developments in Marylebone and Fitzrovia.
Chelsea’s fall in prices since 2014 has been less pronounced than Mayfair and St James’s, down by 15.9% between the peak in the second quarter of 2014 and the latest trough in the first quarter of 2017. However, prices in this area have been relatively flat for last five consecutive quarters. ‘As prices stabilise, we expect buyers’ sentiment to improve also,’ the report says.
In West and South London the prime property market is recovering and the price differential for prime property between Chelsea and Fulham continues to narrow. The impact on sales volumes as a result of the latest recent stamp duty change has been less pronounced in Fulham and Earls Court while in Richmond, Wimbledon, Putney and Barnes prices are close to peak values and sales are up 39% compared to the same quarter in 2016.