Prices in London’s prime property market continue to fall
Prime property prices in London are continuing to fall with buyers price sensitive and ales going through to those who have to move, for example for jobs and schools, the latest research suggests.
In central London prime prices are down by 1.8% in the 12 months to May 2018, down by 0.9% quarter on quarter and by 0.4% month on month and across all price ranges.
The data from international real estate firm Knight Franks also shows that in outer London prime prices fell 3.8% year on year, 0.8% quarter on quarter and 0.5% on a monthly basis.
In central London prices up to £1 million are down 2.4% on an annual basis, down 2.2% in the £1 million to £2 million sector, down 2% in the £2 million to £5 million bracket, down just 0.3% in the £5 million to £10 million sector, and 0.5% in homes priced higher than £10 million.
In outer London prices up to £1 million fell by 4.2% year on year, were down by 4.5% in the £1 million to £2 million bracket, down 4% in the £2 million to £3 million sector, down 5% in the £3 million to £4 million sector, down 1.6% in the £4 million to £5 million bracket and down 2.7% in homes over £5 million.
Tom Bill, head of London residential research at Knight Frank, pointed out that the current period of price declines in prime central London has lasted for almost the same length of time as that recorded in the early 1990s.
However, the current peak to trough decrease of 9% is considerably lower than then. ‘Demand remains price sensitive and driven to an increasing extent by buyers with a need to move, such as schooling or downsizing,’ he explained.
He also pointed out that supply has risen as more landlords attempt to sell following tax changes and as sales pricing appears to bottom out. ‘Some properties have gone back to the lettings market as asking prices are not met but the trend may still weigh on sales prices,’ said Bill.
The research also shows that in a similar fashion to the sales market in prime central London, the number of £1 million plus properties listed for sale in prime outer London rose in May. The figure is the highest in more than four years and the trend may impact pricing in some locations, according to Bill.
The ratio between new prospective buyers and new property listings in prime outer London rose to 5.7 in May. ‘The trend, which to some extent is subject to seasonality, highlights the underlying strength of demand despite the fact that supply levels are rising,’ Bill added.