The latest market snapshot by high-end agency Strutt & Parker reveals more bad news for London - despite the agency itself being made secure as a result of its sale to French bank BNP Paribas.
The sale gives some security to Strutts, which has in the past two years suffered, partly because of the deterioriating London market.
Ironically, as news of the sale was released yesterday morning - EAT reported it here - Strutt & Parker was also revealing quarterly figures showing that London’s residential market as a whole suffered a significant price decrease of 2.0 per cent over the second quarter of this year, ending on June 30.
Transactions in Prime Central London are actually up on the same period last year by 24.3 per cent; however, total transactions across the capital actually decreased by 3.5 per cent in comparison to the previous quarter. This is 22.7 per cent below the five-year average for Q2.
Strutts says much of the downward pressure on PCL house prices because of Brexit and stamp duty changes has already been experienced and although the UK and the world remain in a period of substantial economic and political uncertainty, “the outlook for the UK remains reasonable.”
“Transaction levels in PCL, across all price bands, are up on this time last year and this uptick in volumes is very welcome. However, the values being achieved are lower than they have been – savvy buyers are choosing now to take advantage of current pricing” says Charlie Willis, head of London residential at the agency.
“Whilst one might have expected more transactions from overseas buyers due to the currency benefits currently at play, domestic buyers are the most prolific. We expect prices to remain flat for the rest of 2017 and into 2018 which we hope could spur further activity” he adds.
Strutt & Parker, alongside its economic forecasters Volterra, is forecasting stagnation in 2017 as a best case scenario - with a less optimistic downside risk of a price fall of 5.0 per cent. It anticipates 3.0 per cent growth for 2017 across the UK.
The regional picture for the agency’s sales division is less bleak. “New applicants are up nearly 5.0 per cent year on year. When we look at the average number of applicants we have per property across the UK, it’s higher than it has been at any point since 2012. More prospective buyers lead to higher viewing numbers, which should generate an increase in sales” according to Guy Robinson, head of regional residential at Strutt & Parker.