Sales Market
Autumn 2016

Growth across London is slowing, with the average price of a property up just 1.3% in the month of August to £488,908 according to the UK House Price Index. While annual growth across London remains high (12.1%), all signs are that this will soften over the coming months. The latest survey by the Royal Institute of Chartered Surveyors reports that agents across the capital believe that price growth will fall into the autumn, with little change in prices expected over the next 12 months.

In prime central London (PCL), Knight Frank report that price growth in the year to September was -2.1%, although this masks significant regional divergences. While the lower end of the market, (properties less than £1 million), continues to perform best, Knight Frank believe activity above £2 million is showing tentative signs of improvement. The number of prospective buyers for properties priced £2 million – £5 million rose 8.7% this year compared to same period last year, while in the three months to the end of August viewings on properties between £2 and £5 million rose by more than 66% compared to the same period last year.

The unexpected Brexit result has undoubtedly been a catalyst for overdue price reductions. Vendors are finally accepting that in order to achieve a sale they need to take account of the stamp duty changes that have beset the market since the start of 2015. Favourable currency conditions from overseas buyers have helped create some momentum in recent months, although transaction levels remain nearly 20% down compared to 2015. It is clear that buyers remain cautious, with the average number of days property remained on the market 14% higher between January and August 2016 versus the same period in 2015.

Knight Frank Residential Research, Prime Central London Sales Index, September 2016
Knight Frank Residential Research, Sales Map, Year to September 2016