London housing market showing signs of recovery?
As the autumn weather turns colder, there are slowly growing signs the London housing market may be beginning to thaw. House price declines in prime central London continue to ease. And, transactions are rising compared with a year ago.
Data from upmarket property management firm Knight Frank show the average price of a property in prime central London was 4.6% lower than September 2016. While that still represents a decline, it compares with a 6.7% drop in January and is the slowest since October 2016. In the meantime, property transaction levels between January – August were 9.8% higher than the same period a year earlier.
“A continuing slowdown in the pace at which prime central London property prices are declining, albeit slowly, is a positive sign,” said Belgravia estate agent, Best Gapp. “It also highlights that prime London property is still in demand.”
Stamp duty effect beginning to ease
The combination of the uncertainty caused by the 2016 vote for Brexit and the 3% stamp duty surcharge for owners of more than one property, have both weighed heavily on UK house prices. But, they hit London the hardest.
That wasn’t just due to worries over how popular London would remain once EU divorce proceedings were complete. It also came after city price growth had already begun to lose momentum after reaching such high levels.
“That combination of change would have had a downward effect on property prices anywhere, regardless of how high they might have been beforehand,” said Wimbledon estate agent, Robert Holmes.
Now, however, the stamp duty surcharge is slowly becoming a ‘normal’ of buying a property, for many people. In addition, the Brexit negotiations are so fraught with disagreements, that even now it’s still too early to know exactly what the end result of it will be. And, how that might affect London and the UK.
Higher value London sales improve
The details of the survey also showed that the average price of properties valued between £5 million and £10 million, fell by 2.3% in September from a year earlier. Prime central London properties between the £1 million and £2 million bracket, meanwhile, declined 5.3%, over the same period.
One clear sign of increased buyer caution is the length of time property sales are taking to complete. In September, the average bumper of days between the listing of a property and exchanging contracts was 34, up from 27 in September 2016.
In addition, the number of new properties listed for ales was 18.2% lower between January and September 2017, compared with the same period a year ago.
Taking a look at the entire picture, Knight Frank’s head of central London residential research, Tom Bill, said the latest figures suggest London property prices are on track to end the year, largely flat – in line with their forecasts.
“With four months of 2017 still left to run, it’s still far from clear whether or not London property prices will recover enough to achieve Knight Frank’s forecast,” said Battersea estate agent, Eden Harper. “However, even if they simply continue on the recovery path they’re currently on, then that will represent a promising performance by the English capital city.”