Prime London prices to stay put for the rest of the year
Thu 23 Oct 2014
Prime London prices are set to stay put for the rest of 2014 as supply levels soar.
Its the end of the rise for prime central Londons property prices, says Marsh & Parsons.
Q3 saw prices struggle up by just 0.5% as supply levels jumped by 13%. This, the agency claims, foretells of a flat Q4.
Its quite the turnaround for the market, which saw prices rise by +3.1% in Q2 and by +11.4% over the last 12 months (equivalent to 163,973 on the average PCL home, notes M&P). But its not a surprise. The number of registered buyers per available property in Prime London has fallen from 24 at the start of 2014 to 12 in September, as supply levels have risen by 13% in the last three months. This has cooled the competition and steadied more flagrant price rises.
All this being said, there are still strong capital gains to be had across the capital, says the agency, flagging up outer prime London Brook Green, Clapham and Balham in particular as the place to be to ride the fastest price hikes. Values across prime outer London have posted a +14.5% annual increase, compared to PCLs +9%, and those three energetic highlights have seen +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, says M&P. 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, CEO of Marsh & Parsons : 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. 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.