7th Oct 2016 10:11
LONDON (Alliance News) - Both sales and rental prices in the prime central London market continued to fall in the third quarter of 2016, though at a slightly slower pace than over the past twelve months, property consultant Knight Frank LLP said on Thursday afternoon.
Over the year to the end of September, prices in the prime central London regions declined 2.1%, with the areas hit hardest including Chelsea and Hyde Park, in which prices fell 9.8% and 7.5% respectively. Elsewhere, in Islington and Tower Bridge, sales prices were up over the same period.
In the three months to the end of September, prices achieved for properties in the prime central areas, which also include Notting Hill, Mayfair, and Kings Cross, were down 1.3%.
Knight Frank said both the stamp duty rate hike in April and the uncertainty surrounding the Brexit vote has "been a catalyst for overdue price reductions" for sales in some parts of London.
Forecasts from estate agent Countrywide PLC in August had suggested the outlook for the high-end property market continued to look bleak until at least next August, with a 1.25% expected decline in Greater London prices in 2017 and a 1.0% decline in the South East. These areas, along with the East of England, looked set to fare the worst.
However, Knight Frank in its report noted demand indicators in the prime central London sales market strengthened in the three months ended August.
One example of this was the fact viewings of properties priced between GBP2.0 million and GBP5.0 million rose by more than two thirds when compared with the same period a year earlier.
Meanwhile, the number of properties under offer across the whole market was up 39% in the three-month period on the prior year.
Knight Frank said this increased activity has "yet to translate into higher transaction levels", with volumes of sales down by just under a fifth when compared with a year earlier.
Meanwhile, average rental value of properties within the same areas fell 4.7% over the year, with prices in Queens Park, Marylebone, and Chelsea down the most.
Over the three months ended September, rental values in the prime central London area fell 1.5%.
Knight Frank said this decline in values was largely due to higher stock levels in the lettings market, as the number of new properties coming onto the market rose 44% in the three months to August.
"Both supply and demand have grown markedly as tenants and landlords await more clarity over the trajectory of the sales market," Knight Frank said in its report.
Estate agent Foxtons Group in its last update in July had noted a decline in lettings revenue over its first half ended June 30, though had said this was due to uncertainty surrounding the European Union referendum, increasing tenancy lengths and a high level of renewals.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
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