Despite ongoing political and economic uncertainty, there has been a major improvement in sales volumes throughout prime central London as purchasers seek to take advantage of lower asking prices, according to new research.
JLL’s prime central London report shows that the volume of transactions in the final quarter of last year increased by 36% compared with Q3, reflecting a sharp rise in demand from domestic buyers while the weak pound has made property in prime central London even more enticing to foreign investors.
Although prices fell again in Q4, data from JLL shows that crucially the price declines have diminished during the course of 2016.
The average price drop of just 0.1% in Q4 was a marginal improvement on the 0.2% fall in Q3 and a notable change from the 1.1% and 0.9% declines witnessed in Q1 and Q2 respectively.
The final quarter of last year was also the first quarter in 2016 that prices in the sub £2m market did not drop. Prices also remained broadly flat in the £2-5m price bracket during Q4.
JLL expect transaction levels to be notably higher in 2017 compared with last year and predict that prices will remain broadly flat during the year ahead.
Richard Barber, director (sales) of residential agency at JLL, commented: “Q4 saw a marked upturn in transactional volume throughout prime central London with some notable high value sales.
“Whilst some values have undoubtedly slipped throughout 2016, it was interesting to note that exceptional properties were still commanding high rates per square foot and on a similar level with 2014 peak values.
“Much of this activity can be accounted for by the weakness of sterling and stronger post-referendum sentiment. Whilst this is encouraging going forward, the market will still be mindful of potential external influences such as the road towards a hard Brexit during the course of 2017. Nevertheless, both prime central London demand and sentiment now appear to be stronger.”