LonRes, the London property market fee sharing and data firm, says the capital’s central prime sales market is turning a corner after over three years of dipping transactions and prices.
The company’s latest market report shows that the number of sales in Prime central London increased by 3% during the first six months of the year compared to the same period last year.
“Withdrawal rates are falling in central London and tentative signs are that prospective buyers and movers are beginning to get itchy feet again,” says Marcus Dixon, Head of Research at Lonres (pictured, left)
He also says supply is increasing; the number of properties on the market across all areas of Prime London has risen compared with 2016.
But LonRes Managing Director Anthony Payne (pictured, right) says London’s stucco-fronted prime property market still has a long way to go before it returns to the pre-Stamp Duty increases and pre-Brexit ‘normal’, and that many wealthy people looking to live in London are renting at the moment rather than buying.
Anthony says a house that rents for £25,000 a week or £1.3 million a year in central London would cost £5,150,000 in Stamp Duty, twice that amount payable before the new duty rates were introduced, and that is why the central districts of the capital are so quiet for agents at the moment.
“Couple this with the political shenanigans that add to the difficulty in selling a house in this market and you can quickly see why revenue receipts are declining in London as uncertainty prevails,” he says.
“The tax is such a burden that it makes sense to either rent or not move home at all.”
But Lonres says the downward pressure on prices continues in central Prime London and, of the three key prime areas it examined, asking prices were 4.4% lower during the first six months of the year that in 2016, although achieved prices were only down 0.8% – suggesting vendors are being more realistic about what they can get.