Sales Market
Spring 2016

Average London house prices rose to £530,368 in February 2016 (Land Registry), an increase of 13.5% in 12 months. London remains the strongest performing region across England and Wales with its rate of house price growth more than double the national average (6.1%). The next best performing region is the South East, where prices are rising at an annual rate of 10.9%.

In central London transaction volumes were high in March 2016, despite the number of deals in the previous two months being the same or lower than a year earlier. The uplift was prompted by the stamp duty deadline on 1 April, with buyers of investment properties or second homes keen to complete to avoid an additional 3% stamp duty and vendors pricing more realistically. Prices typically declined by in excess of 10%.

Average annual price growth in prime central London in March was 0.8% according to Knight Frank, the lowest level seen since prices fell by 3.2% in October 2009. The strongest growth continues to be in markets outside of the core prime central area, namely Islington (8.2%) and City & Fringe (8.1%).The mainstream market (below £2 million) has outperformed more expensive properties both in terms of transaction volumes and price growth.

Sales declined across the market after the introduction of stamp duty changes in December 2014, but the fall was less marked for properties below £2 million. Similarly, annual price growth in March 2016 for properties below £2 million was around 3.2%, but prices for properties in the £5-10 million bracket fell by 1.0%. The very top of the market has remained stable, falling only marginally by 0.1%.
Stamp duty has the heaviest impact in high value markets. As a result, the eastern reaches of central London, closer to London’s financial districts, are expected to prosper. Markets east of Mayfair and south of the river are forecast to grow by 5% in 2016.

• Land Registry House Price Index, March 2016 – © Crown copyright 2015 Land Registry. © Crown copyright material is reproduced with the permission of Land Registry under delegated authority from the Controller of HMSO.
• Knight Frank PCL Sales Index, March 2016