London Central Portfolio, experts on residential property investments in Prime Central London (PCL), have analysed the recently released Quarterly Land Registry report and discovered some interesting and unexpected market trends, which go against what other market reports say.
In England and Wales annual transactions increased to 880,959, a 27.8% rise over the preceding year. This pips the long-term average of 869,286 per annum. It was also nearly double the amount seen immediately after the global recession hit in 2008, when transactions stood at just 467,949.
Excluding Greater London, average prices in England and Wales climbed 4.4% over the year to reach £229,147. Including Greater London, average prices were £269,890.
Although a slowdown is expected in Greater London, Q3 2014 still painted a positive picture on all measures. Average prices stretched to £548,040, 2.7% higher than last quarter and 10.7% higher than this time last year. Annual transactions in Greater London remained stable, with 117,362 sales in comparison to 116,551 in the last quarter.
On the other hand, the level of growth was the lowest seen so far this year after 4.9% and 7.6% increases in quarter one and quarter two respectively.
Naomi Heaton, CEO of London Central Portfolio, anticipates a discernible drop in Greater London’s average price next quarter. “A slowdown is inevitable given the high growth rates seen by Greater London over the last year coupled with the prospect of mortgage caps and interest rate rises,” she said. “Not only this but Q4 always demonstrates noticeable seasonality, with price falls experienced every Q4 in Greater London since 2001. Any alarmist reports about prices falls in the next three months should be taken in this context.”
Also unexpected this quarter, perhaps, was the continued positive growth in PCL, where average prices increased 12.8% annually to reach a new high of £1,773,337. In part, this can be credited to a number of high value sales in the PCL “houses” sector – a sector that is notoriously unstable thanks to its tiny size and huge diversity. In this quarter, 235 houses sold at an average price of £4.45 million, an 18% annual increase.
A number of high value sales contributed to PCL’s average price rise, including the second most expensive sale on Land Registry records: £50m for a leasehold flat in Princes Gate, City of Westminster. Of the top 15 most expensive sales in England and Wales, all took place in the PCL this quarter, with prices ranging from £13m-£50m
A slowdown in the short-term is also in the offing for PCL, according to Heaton. “It is to be expected that PCL growth will taper off for the next 6 months, given the high growth levels already seen and the traditional market jitters before any general election,” she commented. “However, there is no evidence that the long term fundamentals for growth will not remain in place. Any price discounts now will present a buying opportunity before the usual post-election bounce.”
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