Another estate agency has closed one of its prime London offices as the capital’s most exclusive areas continue to be hit by transaction falls and huge asking price cuts by desperate sellers.
Harrods Estates has closed its branch on Kensington Church Street according to a report by respected investment consultancy London Central Portfolio. The most high profile office closure in prime London to date was Foxtons’ famous Park Lane branch which shut its doors in October.
LCP’s assessment of the start of 2019 so far shows that average annual prices in Prime Central London now stand at £1,809,860 - that’s down 2.4 per cent over the month and down 5.4 per cent over the quarter.
It says transactions in PCL “remain at historically low levels” and now stand at 3,558, for the last 12 months, a fall of 15.6 per cent: this is fewer than 69 a week.
This means transaction volumes are now down an eye-watering 43 per cent since 2013.
“With just under five weeks to go until the Brexit deadline, many investors are delaying any purchase until April, when there may at least be ‘a clear direction of travel’. However, there is a new momentum in the market as other investors see a moment of opportunity, before demand and Sterling have a chance to strengthen” according to LCP chief executive Naomi Heaton.
The position across the wider Greater London market is less severe, but hardly encouraging.
London Central Portfolio says average prices for Greater London in January stand at £621,019, showing monthly growth of 0.6 per cent but quarterly growth of a mere 0.1 per cent.
“Prices are lower than they were prior to the June 2017 General Election, as confidence continues to hamper the London market” says the consultancy.
Transactions across Greater London have fallen 27 per cent since the introduction of the Additional Homes stamp duty surcharge in April 2016, and the past 12 months alone have seen a drop of 5.2 per cent in transactions, to 88,224.
Heaton warns: “Notwithstanding any decision on Brexit, this protracted period of uncertainty may well continue for 2019 and beyond. Having seen the time taken to negotiate the UK’s exit from the EU, it is likely that the transition period will represent an equally bumpy ride.”
However, in sharp contrast, she says that new build prices have surged ahead showing annual growth of 17.1 per cent.
This has resulted in a 21.6 per cent premium over older stock, the highest in almost two decades but transactions have seen a significant fall of 19 per cent over the year.
"There are now indications that these trends are reversing as developers are obliged to reduce asking prices to gain sufficient traction in the market place to generate sales” says Heaton.