Prime Central London returns to £4.6bn rude health, says agency
Encouraging signs for Prime Central London with JLL expecting it to be the best performing market over the next five years.
More homes sold in the middle of the Capital during 2023 than the three years before Covid with buyers spending £1.1 billion in the fourth quarter (Q4) alone, just -5% lower than the five-year average, JLL’s latest Prime Central London (PCL) report reveals.
Total spend on homes in PCL in 2023, like those pictured, reached £4.6 billion, surpassing the five-year average by 10% with 2023 sales up by 4% on the 10-year average.
ENCOURAGING SIGNS
JLL’s Prime Central London report for Q4 2023 also reveals encouraging signs for 2024 despite the challenges faced by the UK housing market in the previous year.
While the PCL market experienced less activity and a decrease in prices in 2023 compared to the previous year, long-term trends remain robust.
Sales were down -11% on 2022 highs but were up +4% on the 10-year average, with more homes sold in 2023 than any year between 2016 and 2019.
Despite a dip in activity during Q4 2023, buyers spent £1.1 billion in PCL, just -5% lower than the five-year average while total spend on homes in PCL in 2023 reached £4.6 billion, surpassing the five-year average by 10%.
The PCL lettings market also showed signs of recovery, with the imbalance between supply and demand easing.
The number of rental homes available in PCL increased by 64% annually in Q4 2023. Achieved rents fell -0.9% on Q3 2023 but recorded an overall increase of 5.1% compared to Q4 2022.
BEST PERFORMING MARKET
Looking ahead, JLL forecasts that Central London will be the best performing market over the next five years, with an average annual price growth of 3.7%.
Within the rental market, JLL predicts average annual rental price growth of 5.2% over the next five years, supported by the continued undersupply of rental homes in prime central London.
Marcus Dixon, Director of UK Residential Research at JLL, says: “2023 was a challenging year for the UK housing market but the prime central London market has weathered the storm.
“The JLL Prime Central London Index suggests those who need to sell now would achieve 4.9% less than they would have done a year ago. But with few sellers under pressure to transact, we are not seeing any significant fall in prices achieved.”
