There are signs that the prime London market is beginning to stabilise. Savills report average property prices across prime London were just 1.8% lower in the second quarter of 2019 compared to a year previously, less than half the fall experienced in the second quarter of 2018. Prices held firm between April and June for the first time since the autumn of 2015, underpinned by a lack of new supply along with a rise in prospective buyers. Furthermore, competition for the best properties has resulted in competitive bidding on one in six of Savills deals.
Across prime London, Knight Frank report the number of new prospective buyers rose by 21% in the year to May. London agents are also more positive about buyer enquiries than they have been since the start of 2016, according to the latest survey by the Royal Institute of Chartered Surveyors.
Although year-on- year sales volumes in the capital remain muted, LonRes report sales volumes in the first six months of 2019 were just 0.8% lower across prime London than a year ago. Deals for properties priced less than £2 million are up 5.6% on a year ago, while the super prime market (+£10 million) has held its own. Five-year swap rates have fallen in recent months, aiding mortgage market liquidity at the lower end of the market, while the effective discount for overseas buyers purchasing in PCL has been pushed higher. Against the US dollar, sterling weakened to a new post-referendum low of $1.25.
Average property prices across London have seen less stability, falling by 4.4% in the year to May according to the UK HPI. Not since August 2009 has the market witnessed such a fall, as the impacts of Brexit and affordability ripple across the capital.
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