Sales in Prime Central London were down 21 per cent in the year to December according to investment consultancy London Central Portfolio, based on Land Registry adjusted sales and Lonres data.
The fall was significantly greater in the second, third and fourth quarters of the year after buyers had rushed early in 2016 to beat the April deadline for the new additional rate Stamp Duty.
LCP says it is estimated that over 25 per cent of all 2016 sales took place in March alone, whilst half of all sales for the year took place during the first three months.
However, despite the reduced activity prices have still fallen. According to LCP’s analysis, Land Registry demonstrates a 4.5 per cent price increase to October 2016 and Lonres reports a 1.3 per cent increase across the year.
Marylebone, Fitzrovia and Soho put in the strongest performances, showing a 19.7 per cent uplift in price last year over 2015. Price increases were also recorded for PCL’s other lower value areas, such as Notting Hill & Bayswater (up 11 per cent), Pimlico (up 2.9 per cent) and Westminster (rising 2.6 per cent).
The picture, however, was far less positive where prices average over £2m.
Chelsea was hardest hit, reflecting a 12.2 per cent fall in average prices and a 28.5 per cent fall in sales volumes. Falls in prices were also seen in Kensington and St James’s Park & Mayfair.
“The more up and coming areas of the market have remained attractive to buyers, particularly foreign investors, looking for good value in the face of weakening sterling. It is clear that in the current market, London’s centre of gravity has shifted from the traditional, luxury enclaves to the areas with lower entry prices, future growth and gentrification potential - and where tax increases have been far less painful” explains Naomi Heaton, chief executive of LCP.