Sales volumes in the prime central London housing fell by 9% in the 12 months to August compared to the previous 12 months, the latest index data shows.
After strengthening earlier this year, the dip in the market highlights how uncertainty surrounding the final stages of Brexit talks are having an impact, according to the prime London sales index from real estate firm Knight Frank.
But Tom Bill, head of London residential research at Knight Frank says that it is likely to be a short term trend that may reverse once the outcome of the current talks is determined.
However, he pointed out that in a similar fashion to sales volumes, price growth has weakened in recent months, again due to the uncertainty around Brexit continues.
‘This trend has been exacerbated by a growth in supply as more landlords attempt to sell their property following tax changes,’ he said.
Despite the fact that sales activity and pricing have dipped in recent months due to heightened short term political uncertainty, the index reveals that underlying demand has continued to increase.
Indeed, the number of new prospective buyers in prime central and prime outer London grew 31% between January 2016 and August this year.
Meanwhile, in a sign that pent up demand is forming, the total number of prospective buyers was 11% higher in August in prime central London than the same month last year. The equivalent rise was 6% in prime outer London.
A breakdown of the index figures shows that prime central London the price of home under £1 million fell by 0.4% month on month, by 1.8% quarter on quarter and by 3.3% year on year. In the £1 million to £2 million sector they were down 0.7%, down 1.5% and down 3.2%.
In the £2 million to £5 million bracket prices fell on a monthly basis by 0.6%, quarterly by 1.3% and annually by 2.9% while in the £5 million to £10 million sector they fell by 0.5%, by 0.9% and by 1.7%. Above £10 million the decrease was 0.2% month on month, 0.4% quarter on quarter and 1.2%.
In the prime outer London market prices under £1 million fell by 0.4% month on month, by 1% quarter on quarter and by 4.4% year on year. In the £1 million to £2 million price bracket values were down 0.5%, 1.2% and 4.5%.
The data also shows that in the £2 million to £5 million sector prices fell by 0.3% on a monthly basis, 1.5% quarterly and annually by 4.7% while in the £3 million to £4 million sector they were down by 0.6%, by 0.9% and 5.9%.
In the £4 million to £5 million bracket prices fell month on month by 1.5%, quarter on quarter by 2.6% and year on year by 4.1% while in the £5 million plus they were down 0.1%, 0.7% and 4.1%.
