Prime central London sales up but still 32% down on a year ago

Sales in the prime central London property market increased by 21% in the second quarter of 2015 compared to the previous quarter but are 32% lower than a year ago, according to the latest quarterly data.

Prices have fallen marginally, down 0.6% in the second quarter compared to the first three months of the year, according to the latest prime central London report from real estate firm JLL.

But it explains that the sales market continues to show resilience and, although cautious, demand has recovered somewhat since the slump before the general election in May.

But the Stamp Duty Land Tax (SDLT) reform continues to have an effect on the market and buyers and sellers are still assessing the impact of these changes, particularly in the £5 million to £10 million price range. 

Meanwhile, the sub £2 million market has been the least affected by the election, SDLT, and mansion tax fears with prices rising 2.2% year on year.
‘While transaction levels remain low, particularly in the £3 million to £7 million sector of the prime central London market, there is undoubtedly a noticeable flight to quality,’ said Richard Barber, sales director at W.A.Ellis, part of the JLL Group .

‘Affordability issues, in the face of increased stamp duty costs, have affected purchaser confidence, but high prices per square foot are still being achieved for the most exclusive properties,’ he added.
The prime central London lettings market has seen a rise in demand from tenants, while levels of supply have remained high throughout the second quarter, the report also shows.

It says that London’s improved economic conditions are causing a rise in rental values, up 1% compared to the first quarter and 1.5% year on year. Overall, lettings transactions have increased by 4% in the second quarter as election uncertainties resulted in some buyers choosing to rent instead. However transactions are down 8% year on year.

‘There has been an increase in rental stock available, mainly as a result of landlords awaiting the outcome of the general election and deciding now to let instead of sell, and these higher stock levels have meant that competition between landlords has increased with properties in optimal condition letting first,’ said Lucy Morton, letting director and head of agency at W.A.Ellis.

‘This has also meant that the market has become very price sensitive with more people turning to the rental sector after being unable to secure finance or find the right property to buy,’ she added.

The report concludes that overall, the outlook for the prime central sales market is one of confidence in light of the stable government and low interest rates, with prices expected to increase by 1.5% during 2015, while the lettings market will see rental values increase by around 3% with more people preferring the flexibility of renting.