Press Release: Prime London house prices expected to stay flat until end of the year
Wed 22 Oct 2014
- House price growth across Prime London slows to 0.5% in Q3 2014, down from 3.1% last quarter
- Ratio of buyers per property drops to 12 in September, as supply soars 13% in three months
- However, one- and two-bedroom homes in Outer Prime London outperform the rest of the city in annual growth stakes, up 19% in past year
Prime London house prices will remain stable until the end of the year, according to estate agent Marsh & Parsons latest London Property Monitor.
Following a robust 11.4% climb in Prime London property values over the past 12 months, equivalent to 163,973, there has been a sharp drop in the rate of quarterly price growth across the capital, and prices are predicted to flatten until the end of the year. The average Prime London property has risen 0.5% in value over the course of Q3 2014, less than a sixth of the 3.1% rate witnessed in the previous quarter as growth tails off into a more sustainable trajectory than at the start of the year.
House price rises have been steadied by rising supply of Prime London property on the market, up 13% in the last three months. This has cooled the level of competition in the market and the number of registered buyers per available property in Prime London has fallen from 24 at the start of 2014 to 12 in September.
Peter Rollings, CEO of Marsh & Parsons, comments: "Weve reached a plateau in the course of house price growth, and the path paved out for London property prices for the rest of 2014 looks to be levelling off. This isnt terminal, but just a necessary pitstop in the long-term growth and sustainability of the market. And it doesnt mean were in for a quiet winter either. Sales will continue, albeit at a more 'normal' level, as buyers revel in the greater choice on offer, and without the frenetic competition many faced at the start of the year. With more realistic pricing sellers are prospering too, and on average 98% of the asking price is currently being achieved on properties sold.
"In the hubbub surrounding the property market recently, seasonal patterns have been lost in translation. The majority of house price growth typically falls in the first half of the year, so this autumnal re-calibration is nothing new. Price growth may have paused to catch its breath, but come January we expect the heartbeat of the property market to quicken again as growth awakens for another healthy year.
"But as thoughts fast-forward to May and electioneering ramps up, caution will be exercised by many homeowners and would-be investors, as high-end property is marked out as a key battleground. Wading in with a 'mansion tax' threatens to douse the growth at the top tiers of the market, and in London especially, thousands of ordinary families would get swept up in its wake. Packaging it as a levy on mansions is misleading - across the capital, it is tricky to find a home big enough for your average 2.4 family without a million pound price tag."
Prime London Property Price Movements
|Average Value||Quarterly Change||Annual Change|
|All Prime London||1,598,401||0.5%||11.4%|
|Prime Central London||2,246,656||0.3%||9.0%|
|Outer Prime London||1,193,241||0.8%||14.5%|
There are still strong capital gains to be had across the capital, and house prices in Outer Prime London are climbing at the fastest pace showing a 14.5% annual increase, compared to 9.0% in Prime Central areas. Brook Green, Clapham and Balham are streaking ahead of the pack in particular, with energetic annual house price growth of 22%, 20% and 17% respectively.
One- and two-bedroom properties in Outer Prime London have seen the steepest annual growth, appreciating in value by nearly a fifth (19%) in the past year. The average one-bedroom property in Outer Prime London has increased in price by 86,880 in the last year, equivalent to 1,670 a week two and half times the median London salary, currently estimated to be 658 per week.*
Peter Rollings concludes: "When it comes to watching house price growth play out, Outer Prime pockets are the citys star performers. Savvy first-time buyers are looking for a cheaper route onto the property stage, and young families are casting their net wider to get more space for their buck. With the average price of property in Outer Prime areas only three-quarters that across Prime London overall, its becoming their first port of call. High demand has pushed price inflation in areas like Balham and Brook Green to a pace unrivalled elsewhere across the City."
Property Type Breakdown
|All Prime London||Prime Central London||Outer Prime London|
For further detailed analysis, please see Marsh & Parsons accompanying London Property Monitor for Q3 2014, released today.
Peter Rollings, CEO at Marsh & Parsons, is available for interview to discuss the findings. Please contact Emily Barnes on 020 7247 1403.
*ONS Annual Survey of Hours and Earnings, Provisional Results 2013
The Prime Market Monitor uses a repeat valuation methodology that tracks values in a robust and representative mix-adjusted basket of properties across Prime London in the main areas in which Marsh & Parsons operates. Prime Central London comprises representative baskets of properties covering Chelsea, Kensington, Notting Hill, Holland Park and Pimlico. Outer Prime London comprises areas such as Clapham, Balham, Battersea, Barnes, Little Venice, Fulham and Brook Green. Prime London describes all these areas combined including Prime Central London and Outer Prime London.
Supply and demand statistics are based on an audit of Marsh & Parsons registrations and instructions during the quarter. Buyer profile information is taken from Marsh & Parsons quarterly MI data.
For further information please contact: The Wriglesworth Consultancy, Emily Barnes / Neil Mackwood 0207 427 1403 / 0207 427 1400
About Marsh & Parsons:
Marsh & Parsons, a multi-award winning estate agent, has been part of the London property scene since 1856. With 22 offices situated in prime positions across central, west and south west London, they have an intimate and extensive knowledge of the area. Marsh & Parsons services include residential sales and lettings, property management, new homes, developments & investments, professional surveying and corporate & relocation services.
Marsh & Parsons was acquired by LSL Property Services plc in November 2011, but continues to operate as a separate business, retaining its current management team.
A business that is built on energy, agility, professionalism and knowledge, Marsh & Parsons business aim is to be the agent who not only understands the local area around their offices better than any other agent, but is also at the heart of the community. They believe that Local know-how will achieve better results and make the difference for their clients.