Sales in prime central London in the year to the end of March are a huge 41 per cent below the previous 12 months, according to an investment consultancy which has analysed Land Registry figures.
Despite this, average prices have recorded a slight increase despite Brexit and stamp duty, according to Central London Portfolio.
Average prices reached £1,914,789 following quarterly price growth of 4.6 per cent over the first three months of this year. LCP says this has been buoyed by a greater proportion of more expensive properties being transacted, with an 8.5 per cent annual price increase for properties transacted between £2m and £5m.
But it says the sales figures are worrying; sales in Q1 2017 fell 21 per cent from Q4 2016.
On an annual basis just 3,406 sales took place, a fall of 41 per cent over the previous year. Sales levels are the lowest level on record, even less than during the global financial crisis up to a decade ago.
However, the consultancy says the limited price growth seen recently in prime London can be attributed to a number of unusual factors and may not reflect any genuine underlying price appreciation.
“The increase is likely to reflect a greater proportion of higher value properties being sold, rather than real underlying price growth” warns Naomi Heaton, chief executive of London Central Portfolio.
“Transaction data shows that the £2m to £5m bracket was the most active last year ... This can, in part, be attributed to international buyers taking advantage of significant price discounts offered on top-end properties and beneficial currency exchange rates. Prices are now 13 per cent cheaper for dollar denominated investors than the beginning of 2015” says Heaton.
According to LCP, buyers are also increasingly acquiring in their own names, rather than in companies, or they are 'de-enveloping' their existing properties from corporate wrappers.