2017 was a year of price readjustment in the prime London housing market. The continued impact of heightened property taxation and uncertainty over the implications of Brexit resulted in significant readjustments in property prices. Knight Frank report that across prime central London 40% of sub £2 million properties underwent a price reduction in the year to November, versus 29% above £5 million. Data from LonRes indicates that properties sold on average for a 10% reduction on initial asking price.
The UK House Price Index shows that annual price growth across Greater London was 2.1% in the year to November, lower than that of England and Wales every month since December 2016. According to Knight Frank, in prime central areas, average prices fell by 0.7% in the year to December, the most modest rate of annual decline recorded since June 2016, a suggestion prices are bottoming out. Meanwhile the Royal Institute of Chartered Surveyors (RICS) reported in December the proportion of agents expecting prices to fall over the next three months was at its lowest level since April 2017.
Transaction volumes have remained steady throughout 2017. LonRes data indicates that December was the second busiest month of 2017 for sales across prime London, with sales volumes 9.4% higher year-on-year in the six months since June. A net balance of agents in the December RICS survey predicted activity levels will improve across London over the next twelve months.
As for 2018, while London retained its title as the ‘World’s Best City’, beating New York and Paris in the Resonance ranking of Global Place Equity, buyer sentiment is still liable to be affected by the ongoing Brexit negotiations. An average of independent forecasts predicts house price inflation across the capital will be 0.6% during 2018, while a consensus of forecasts produced by HM Treasury predicts a rise of 1.9% across the UK as a whole.
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