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TODAY'S OTHER NEWS

Sales and rental values in PCL set to rise over the next five years

Prices in Prime Central London (PCL) are predicted to rise by 18% over the next five years, while cumulative rental growth of 10% is forecasted in the same period, according to Knight Frank’s sales and lettings index for December 2019.

Sales market in PCL

The property consultancy says there will be more modest growth in the short-term as the threat of a no-deal Brexit continues, combined with the possibility of stamp duty changes, the ‘erosion of the Sterling discount’ and the normalisation of interest rates.

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Price growth will then pick up before moderating in 2024, the year of the next election.

Some more good news, though, as the firm witnessed 18% more exchanges throughout 2019 in PCL than the equivalent period in 2015.

However, PCL saw supply levels fall in the second half of 2019, with the overall number of £1 million-plus listings in November 17% lower than it was in the same month last year. The number of active sellers fell in response to amplified political uncertainty – a trend Knight Frank says is likely to reverse following the General Election.

What’s more, shares in the Household Goods and Home Construction Index were 24% higher in mid-December than they were at the start of 2019.

Lettings market in PCL

Knight Frank expects increased private investment and public spending to stimulate tenant demand as the economy strengthens, but there will also be downwards pressure on supply as more meaningful house price inflation returns to the sales market – which will prompt more owners to sell.

It says this lack of supply will have a more marked impact in lower-value lettings markets.

Just like sales, the number of new rental listings in PCL declined 8% in the year to November compared to the previous 12 months. The decline in prime outer London was 14% over the same period. The firm predicts this trend will accelerate in 2020 in response to an anticipated bounce in the sales market.

The number of new prospective tenants per new rental listing was 7.5 in November for properties valued at less than £1,000 per week in PCL and prime outer London, which is greater than a figure of 3.4 properties valued between £1,000 and £4,000 per week.

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