Greater London residential prices hit record levels

George Sell George Sell Uploaded 02 June 2016


UK: Land Registry figures show that the average property price in Greater London has hit £600,000 for the first time.

Average prices have increased in Greater London have increased 14 per cent year on year and 7.9 per cent over the preceding quarter to £600,076, while prime central London (PCL) has seen a 4.7 per cent annual rise and a two per cent quarterly rise to an average of £1,673,906. Transactions in prime areas have increased 33 per cent in Q1 2016, as buyers rushed to beat April's additional rate Stamp Duty deadline.

Naomi Heaton, CEO of London Central Portfolio, said: "Whilst making for somewhat staggering reading, the increase in sales is not actually surprising. Buyers, wanting to access the PCL market, rushed in during Q1 to beat the three per cent Stamp Duty deadline which created an uncharacteristic surge. This one-off anomaly is likely to be steeply eroded next quarter, magnifying the contraction in sales already anticipated across the rest of the year."

According to LCP, prices will also soften as transactions plummet following the Q1 stampede and tax changes continue to affect the upper-end of the market. This is being compounded by "pre-referendum jitters and global economic uncertainty, as international investors face struggling stock markets, falls in oil prices and an unsettled Chinese economy".

Heaton said: "As has been demonstrated time and time again, central London slows down in the face of investor uncertainty; for example after 911, during the Iraq war and in the face of a weak stock market in the early 2000s. All the evidence, however, suggests that the market rallies quickly thereafter, particularly at the lower price points. In 2010, prices bounced back post credit crunch by 22.7 per cent following a fall of 16.3 per cent the previous year. To capitalise on the current conditions, purchases should be focused on the sub-£1m sector of the PCL market. This has been far less affected by recent tax changes and future price growth is expected to be robust."

Naomi Heaton will be speaking at Serviced Apartment Summit in London next month.


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