Prime central London seeing sales fall, latest monthly analysis suggests
The sales market in prime central London is active for properties priced correctly but overall sales are down 17% year on year, a new report shows.
The latest monthly report from residential sales and lettings firm W.A. Ellis says that realistic pricing is key and it is the family house market that is the most buoyant but supply outweighs demand in various areas of the market.
Although there has been much talk of a housing bubble, a more cautious story is emerging in the prime central London property market, according to Richard Barber, partner with the firm.
‘It is the rate of transaction which is of most concern and a strong barometer of confidence within the upper end of the London market. In May 2013 some 932 properties in total were sold throughout London. However, this May, there have only been 774 sales, almost a 17% reduction in transaction levels year on year,’ he pointed out.
‘It is also interesting to note that 25% of the house stock currently available on the market has been reduced in price, indicating an initial optimism now countered with a distinct sense of realism, as the window of opportunity within the Spring/Summer market begins to narrow,’ he said.
He also pointed out that year on year the average rate per square foot achieved on houses is 1% down from the £1,876 per square foot that was being achieved in the first quarter of 2013. In the first quarter of this year it was £1,858 per square foot.
‘That said, we are enjoying an active spring market with correctly priced property selling well but the froth has undoubtedly come off. We believe that this is partly due to the government’s tax on ‘enveloped dwellings’ (those held in company names) and the increase in SDLT. Looking ahead, realistic pricing is key if one wishes to effect a sale within the next six weeks before the traditional summer slow down,’ explained Barber.
The lettings market is sporadic with supply now outweighing demand in various areas of the market, according to Lucy Morton, senior partner and head of lettings at W.A. Ellis. There has, however, been increased activity in the sub £1,000 per week one to two bedroom price range, and she is also seeing a very buoyant family houses market.
‘We have seen a 12% increase in the letting of family houses since January 2014 compared with the same period in 2013, and as families are keen to settle before the start of the new school year, we cannot see this waning,’ she explained.
‘We have recently launched four substantial family houses in Kensington and Chelsea, and are already receiving a healthy number of enquiries from families who are beginning to come to London to get settled this summer. A five bedroom house we launched on Brompton Square has already gone under offer at a rent above the outgoing rent with no void, and on the same day, a tenant gave notice on a fantastic five…