Recent debate about a London market slowdown has clouded the fact that the areas seeing price falls are almost entirely in the ‘prime centre’ and not in the outer boroughs, insists an estate agency.
Stirling Ackroyd says price drops have been confined to the struggling top 25 per cent of London’s property market where there have been falls equivalent to 2.4 per cent.
“By contrast, if London’s old luxury postcodes are excluded, the remaining three quarters of the capital saw an annualised house price growth of 8.2 per cent for the overwhelming majority of London’s more ‘normal’ neighbourhoods” says a statement from the agency.
Across the board, house prices in the capital rose by 1.6 per cent in Q4 2015, the latest figures released by the firm, with the average London property now worth £533,000. As a broad average this translates to a 6.6 per cent annualised growth rate for the whole of Greater London.
Out of a total 272 postcode districts in the capital, 47 saw local drops in average property values - the equivalent of 17 per cent of the total. The significant majority of these 47 were in London’s traditional ‘prime’ top quarter of the market as measured by absolute value.
Within the top quarter of London’s property market, a given postcode has a roughly 50:50 chance of hosting falling house prices whereas for the rest of the capital a given postal district has a 93 per cent probability of price rises, insists Stirling Ackroyd.
“Luxury no longer means profit – or at least you can no longer presume so. London’s hugely diverse property market is undergoing a serious readjustment, with the traditional old heart of ‘prime’ London under pressure from many fronts from a low global oil price and China’s economic slowdown, to stamp duty reform and international fears of Brexit” says Andrew Bridges, managing director of Stirling Ackroyd.
“Yet for most of London’s communities, these factors affecting luxury buyers are less important. There are still too few new homes coming onto the majority of the market compared to demand from a growing population – and the majority of the London market is still in tune with, and restrained, by those fundamentals. Anyone who thinks that London property is synonymous with international jet setters is only looking at a very small part of what London has to offer” he says.
He says the areas leading the slowdown are particularly those lying in the West and South West.
Areas within the W postal area include Kensington High Street (W8) which experienced an annual rate of falling prices of 11.8 per cent - followed by Notting Hill (W11) and Chiswick (W4), falling the equivalent of 10.0 per cent annually.