Sales Market
Autumn 2018

Annual house price growth across the UK has remained broadly stable, between 3.2% and 3.4% in the four months to August, according to the UKHPI. Across London, prices remain marginally lower (-0.2%) than a year ago, while prices across the prime central London market continue to falter as the Brexit deadline looms ever closer. Rhetoric from both sides in recent weeks has swung between positive and deadlock and it remains to be seen if transition agreements can, and will, be agreed.

Sales Market Figure 1According to data from both Knight Frank and LonRes, sales volumes across prime London in the first nine months of the year are some 9% lower than during the same period in 2017. However, this disguises significant nuances across the market. Sales between £1-£3 million have fallen by over 20%, while transactions between £3-£5 million and £5-£10 million show a year-on-year improvement. On the market deals for properties over £10 million are at the same level as a year ago. Those purchasing in 2018 will undoubtedly have benefitted from currency fluctuations and price readjustment. Average prices per square foot across prime London are currently 4.7% lower than a year ago according to LonRes, while Savills forecast prices will have fallen by 5% over the course of 2018.

Sales Market Figure 2

However, Knight Frank assert there is clear pent-up demand across the market. The number of new prospective buyers across prime central London rose 11% in August compared to the year previously, while Savills argue the uncertainty over Brexit has done little to alter the fundamentals of why people want to live and work in London. A recent poll of global High Net Worth Individuals (those with investable assets of +$1 million) by Luxury Portfolio International found the highest proportion of HNWIs view real estate as the most obvious indicator of wealth, with 38% anticipating purchasing over the next three years, compared to only 23% who are considering selling. While there is little to suggest prices will rebound anytime soon, Savills anticipate compound growth of 12.4% across the prime London markets by 2023, with prices forecast to jump significantly once a formal full agreement for Brexit is in place – currently 1st January 2021 when the post-Brexit transition period is currently due to end.