Central London residential property market seeing more stability

Having recovered somewhat from a turbulent few years since 2015, the central London residential property market is now holding steady, with prices remaining mostly unaffected for the past 12 months.

There have been only moderate changes showing throughout the last year due to seasonal fluctuations but sales are still 37.7% below the peak of the market in 2014, according to the latest research from Winkworth.

It is the lower end of the market where properties are selling more and high volumes of lower value transactions in the second quarter of the year have resulted in the average price being down 12.7% on the same quarter last year.

The average price per square foot now sits at £1,194, a marginal increase on the second quarter of 2017 but still sitting 16.9% below the second quarter of 2014. The report points out that following two strong periods for the market in the final quarter of 2017 and the first three months of 2018, the second quarter appeared more subdued tone.

It explains that part of the marginal slowdown is due to fewer buyers being active in the investment market and would-be movers continued to put a hold on their plans as they await a more assured political outlook ahead of Brexit.
Owner occupiers moving as a necessity dominated market activity and this has been the case for a while now, the report points out, but increasing volumes of buy to let landlords are also returning to the sales market to cash in on their investments and avoid being hit by the tax hikes and new regulations brought into the lettings sector over the past few years.

‘On the whole, the central London market remains in a period of stability and those wishing to sell should be confident that, as long as its priced correctly, their property will sell,’ the report says.

The report also reveals that the average percentage of asking price achieved has also remained fairly flat at 92.4%, compared with 92.6% achieved in the first quarter of 2018, and up from 91.4% in the second quarter of 2017. But it is 7.7% below the 2014 peak, when central London Winkworth offices were achieving on average 99.5% of the asking price.

Average number of viewings per sale during the second quarter of 2018 remained static at 25, with no change from the previous quarter and this is 13% below the second quarter of 2014 when the average number of viewings per sale was 29.

‘This year has seen what can only be described as an inverse market, with a busier than normal start to the year and an unusual lull through the second quarter which is typically one of the busiest times of the year,’ said Dominic Agace, Winkworth chief executive officer.

‘Despite the inverse market, activity has stabilised significantly from the past few years and is now coming to a plateau where it’s still moving steadily, but far below the levels seen in the 2014 peak,’ he explained.

‘With ongoing talk of the Brexit deal and political turbulence, it’s likely that this subdued
central London market will continue this way, experiencing only minor fluctuations as we move through each quarter until we have a clearer idea of exactly what Brexit deal and Government changes will take place,’ he added.

‘That said, there is still strength in the market and it’s quite possible that activity could pick up as we head further into summer. After all, those that are serious and realistic about moving are seeing transactions going ahead as usual and, with prices static, now is a good time to trade in the market and not miss out on a good deal,’ he concluded.