UK property price growth remains low at 0.7% in the 12 months to the second quarter of 2019, whilst prime central London prices are now 20% below 2014 peak, the latest market analysis shows.
Nationally house prices are now 16.6% above the pre financial crisis peak and in London this figure rises to 53.5%, according to the residential quarterly report from Strutt & Parker.
It also shows that total transactions in the prime central London market grew by 5.3% in the first half of 2019 compared to the same period of 2018 but sales in the sub £2 million sector increased by 28.9%.
‘Transaction levels indicate that the markets are relatively stable during this time of economic and political uncertainty, however we know that pricing has become more fickle, especially in prime central London,’ said Vanessa Hale, director of research at Strutt & Parker.
Outside of London, all regions saw some level of transaction volume in the country house market for properties over £2 million. The South East remained the region with the highest volume of detached homes that sold for more than £2 million. The East of England followed by the South West complete the top three regions for the most transactions of £2 million-plus properties.
Guy Robinson, head of residential agency at Strutt & Parker, pointed out that stock remains stubbornly low and is a key reason for a subdued market. ‘We cannot predict what will happen after October 31 but for now, we are experiencing an increase in buyer interest and activity is relatively stable,’ he said.
Meanwhile, Louis Harding, head of London residential sales at Strutt & Parker, said the firm is cautiously optimistic about the prime central London market. ‘Price expectations amongst both sellers and buyers has narrowed and we expect our 2019 transaction numbers to be comfortably up on the previous year,’ he explained.
There has been a marked increase in activity and offers received over the last quarter, particularly in properties that sit above £5million, according to Mark Dorman, head of London residential development and investment at Strutt & Parker. ‘Only when vendor expectations and market perceptions are aligned are we seeing an increase in transactions,’ he said.
In the prime central London lettings market, the take-up of new rental tenancies decreased overall by 10.8% in the second quarter of 2019 compared to the same period last year. Figures again demonstrate a polarised market, with the biggest downturns in the sub £500 per week bracket.
‘As stock levels in prime central London lettings continue to decline we are seeing some competitive bids for turnkey properties in key locations. More generally, where demand remains high but stock is scarcer, we may see rental prices move upwards,’ said Kate Eales, national head of residential lettings at Strutt & Parker
