There have been 26% fewer homes sold for £1m or more in the prime central London area in the past year.
The Land Registry figures are backed up by Knight Frank’s most recent prime central London sales index, which shows that annual price growth was, at 1.7%, at its lowest level for more than five years.
Without the newer prime central London markets of Islington, Riverside, City & Fringe and Southbank, growth was just 0.4% over the past 12 months.
The Knight Frank report into prime central London sales in August said: “Demand was unsurprisingly restrained 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 the market in August was particularly hit by China devaluing its currency, which had caused “some buyers to postpone decision-making until there is a greater sense of certainty”.
But, it added: “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 rise since November 2009, eight months after the market had bounced back from its post-Lehman Brothers low point.
But the report optimistically added: “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.”
Tom Middleditch, an associate director at JLL Kensington, said: “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.”
Comments (1)
Beware, everyone in the residential market. Could this be a sign of things to come as the “ripple” effect works its way out from the prime London market. August is always the quietest of months but any slowing of the market will cause everyone serious issues, particularly in view of the low stock levels. I have a feeling that the very low stock levels are all that has been keeping the market as strong as it has been. Fortunately supply still remains just a little below demand so prices in the suburbs are still on the up – but for how long??? What goes up will keep going up – until it starts to go down!