The London residential market is at last improving - but faces a make or break situation with next week’s Budget according to a property investment specialist.
London Central Portfolio has analysed Land Registry data for the third quarter of the year and says sales volumes were up 7.5 per cent on the previous three months.
Data for London also pointed to stabilisation after a period of volatility, says LCP.
Whilst a 2.8 per cent quarterly decline in average prices was recorded, prices are 8.3 per cent higher than a year ago, standing at an average £619,203.
Transactions, which had seen consistent year on year double digit falls since the stamp duty surcharge was introduced in Q2 2016 until Q1 2017, also showed a marked improvement.
Volumes were up 7.5 per cent on a quarterly basis to 23,737, following a slight increase of 1.15 per cent in the previous quarter.
The statistics also reveal an interesting shift in dynamics in London from flats towards houses, suggesting that higher value buyers may be returning to the market.
Compared with Q3 2016, 20 per cent more houses were purchased, with semi-detached properties being the most popular, showing a nine per cent increase, followed by detached houses at eight per cent.
Flats, on the other hand, saw an eight per cent decline in sales.
“It is encouraging to see the market pick up following unusual volatility over the last two years in the face of penal tax changes. The return of higher value buyers to the market is also evidenced in Prime Central London where LCP has seen a trebling of its ‘home’ buying clients, acquiring in prestigious areas like Regent’s Park and Knightsbridge” explains Naomi Heaton, chief executive of London Central Portfolio.
“Whilst the latest outlook for London and England and Wales is encouraging, rumours of further tax changes in next week’s Budget could make or break any conspicuous recovery. The Chancellor should take heed of the delicate position of the market where more interference may tip the scales back in the other direction” she adds.