Estate agent WA Ellis has released its latest commentary on the Prime Central London (PCL) residential sales market.
It says activity across all price ranges is stable' as research shows a reduction in transactions of just 3.5% from January to August 2013 compared with the same period in 2014.
It found that transactions between £2m and £5m increases by 11.7% this year; although sales above £5m went down by 5.5%.
Richard Barber, partner at WA Ellis, said: Commentators regularly compare the market, both in terms of capital values and transaction levels with the glory days of 2007 where, pre-Lehman Brothers, we enjoyed a soaring market fuelled by domestic and foreign investment into Prime Central London.
If we compare the current year's activity (January to August 2014) with the same period in 2007, within our area of expertise (Chelsea, Knightsbridge, Mayfair, Belgravia and Kensington) we see a 35% diminution in activity. However, when one factors in the inflation that the capital has enjoyed over the last four years (18.5% in the last year alone according to Land Registry data), a more interesting picture emerges.
Property transactions between £2m and £5m have increased by 17.5% and those in excess of £5,000,000 have increased by 72% on 2007. Whilst the media are reporting more bearish sentiments across the market and reduced levels of new buyer registration, we should not necessarily predict that the bubble is about to burst. Activity across all price ranges is very stable, and our research suggests that between January and August 2013 there were 1,288 transactions, and in the same period in 2014, 1,242 - a reduction of only 3.5%.
Whilst the Damoclean sword of mansion tax continues to hover over the PCL market, the figures suggest that it has not as yet impacted. Indeed, sales between £2,000,000 and £5,000,000 have increased by 11.7% this year. However, sales of properties over £5,000,000 have diminished by 5.5%. The reduction in activity over £5,000,000 is perhaps indicative that the foreign investor may tolerate a tax of £15,000 per annum (based on the current ATED charges) but not the more punitive £35,000 charge per annum currently applied to properties held in company names with values in excess of £5,000,000.
Whilst a combination of the strengthening pound, mansion tax, CGT for foreign investors and the Mortgage Market Review introducing tougher lending criteria for borrowers may dampen market sentiment, there is always a healthy appetite for the right product, and if vendors' expectations are realistic, there is no reason why we should not enjoy a normal' market.
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Comments
Silly folk, this is just a PR story to promote their brand, silly talk of poor FTB is just that silly! If prices had fallen by 10% they still would not be able to buy these properties would they! Grow up, rent a council house!
'Chelsea, Knightsbridge, Mayfair, Belgravia and Kensington' - playground for the rich and famous only, surely
Another world. Must make depressing reading for all those young first-time buyers out there trying to get anything - a foot, an arm, a finger, a toe - on the property ladder, knowing that they would never in their wildest dreams be able to afford houses going for 2m upwards.
'It found that transactions between 2m and 5m increases by 11.7% this year.'
Something that is of no relevance to the majority of people looking to get on the property ladder. Oh look, the sale of mega-expensive houses has gone up. Brilliant. But what about the vast majority who don't fall into this category