Brexit continues to dominate the headlines. Resilient buyers sought to close deals across the capital before the 29 March deadline, others are watching and waiting for a clarity and certainty that, despite the extension, remains elusive.
- Annual price growth across London during Q1 at its lowest level since 2009
- Price negotiation remains a significant factor – properties selling for an average 11.5% discount on asking price
- Sales volumes down 4.3% on a year ago
- A supply demand imbalance points to an uplift in rental prices in coming months, annual rental price growth at its strongest in 16 months
- For Central London, Cluttons anticipate a 3% fall in values over the course of the year but confidence to return once the uncertainty recedes
- Except for 2019, Cluttons expect London to outperform the UK during 2020-2022
- Cluttons anticipate rental price growth will outperform sales across Central London in each of the next four years with cumulative growth of 7.6%
James Hyman, Head of Residential, Cluttons comments:
“We are beginning to see more activity out there but only at the right price. Sellers who are prepared to price their properties sensibly will get offers. For example, we marketed three properties last week at 15-20% lower than the original price – within 48 hours we had multiple offers.
“There has been a lot of discussion about the recovery of the London property market once there’s a resolution to Brexit. This simply won’t be the case. There’s effectively three years’ worth of people who haven’t put their house on the market, creating a ‘Brexit bottleneck’ which will lead to a sharp correction when they do.
“If people are serious about selling, they should market their properties now to beat the rush of supply. However, they do need to be realistic about the price – nothing has changed in terms of affordability. Buyers haven’t suddenly got bigger salaries and they still must contend with the tighter lending criteria imposed by the CML.”
Waterfront special topic highlights:
- One in fifteen properties sold across London in 2018 was situated within 100m of the Thames with an average price premium of £270k which is virtually half the average price of a property across the capital
- Despite market conditions the premium for waterside property in London has strengthened (23% over the past five years)
- It is not just riverside, waterside properties elsewhere in London also command large premiums (Chelsea Harbour 287%, Paddington basin 103%, St Katherine’s Dock 50%)
- 1 in 10 of London’s waterside properties are within London’s protected vistas, such properties, on average, sell for twice the price of those that are not. A premium of 124%
- Average prices of waterside properties within London’s designated protected vistas have exceeded £1m since 2014, prices in 2018 £1.6m
- The price differential for living close to the river on the South is considerably higher than the North
- Prices on of waterside property in the South have witnessed a more rapid growth, increasing 31% in comparison to 23% in the north. New build property have seen even greater growth, breaching the £1m threshold, up 40% since 2014
- As areas of the South riverbank now rival their northern counterparts on price, connectivity and accessibility, London is witnessing the emergence of a new prime residential enclave – indeed should South Bank now be included as Prime Central London?