The Land Registry is reporting that the average value for a home in London has dropped by 1% or £5000 to £471,986 over the past year ending in February 2018. Not since the 2009 global financial meltdown has the housing market witnessed a decline. The continuing negotiations with Brexit and other political issues have contributed to the decline.
The residential areas that have been most effected in the price decline are in the more expensive locations with Tower Hamlets seeing a decline of 7.9% , Hammersmith & Fulham with 5%, City of London with 4.4%, Wandsworth 2.6% and Westminster having a decline in prices of 2.4%.
Analysts blame higher taxes as the principle cause for the fall in prime property market prices.
For the rest of England prices rose 4.1% to bring the average value for homes at £242,176.
Jeremy Leaf, north London estate agent and a former residential chairman of the
Royal Institution of Chartered Surveyors, told the Evening Standard (ES):
“Looking at the last few housing market surveys, a clear pattern is beginning to emerge.”
“We are seeing a two-tier market developing, with higher national property prices masking stagnating, or even falling prices, in London.”
“As a result, the old north-south divide is turning on its head with northern areas steaming ahead much faster than the rather sluggish south.”
Chief property analyst at fixed fee estate agent Yopa, Mike Scott said to the ES:
“With no sign of a turnaround in the London market, we expect it to continue to be the worst performing region for the rest of this year, while prices carry on increasing in the rest of the country, albeit at a slower rate.”
Average rents in the prime sector have declined 1.5% over past year ending in March 2018 and the volume of new rental properties available fell 5% in the year ending in February 2018.
Tom Bill, head of London residential research at Knight Frank’s says:
’To put that in context, the last English Housing Survey estimated that the private rented sector accounted for 30% of all tenure types in London, a figure Knight Frank estimates could be as high as 50% in Kensington and Chelsea and Westminster.’
Tenant demand continues to grow, suggesting continued upwards pressure on rents. The number of new prospective tenants that registered in the year to February was 16% higher than the previous 12 month period, Knight Frank data shows. Meanwhile, the number of viewings rose 14% over the same period.
Prime properties in Central London valued at £10 million and above have not seen an increase in prices but declines have occurred in the £1 million to £2 million range dropping 1.4% and the £2 million to £5 million price range with a decline of 1.8% in values.
Tom Bill of Knight Frank’s was quoted in Mansion Global:
“While the market remains sensitive to political events, there currently appears to be a sense of (relative) stability being restored.”
“However, we do not believe the sales market is poised to enter a strong upswing in terms of pricing or trading volumes.”
By Kevin Murphy: www.kevinmurphy.london