More London gloom as agency reports further price falls

Another high end estate agency is reporting difficulties in the London market with Knight Frank saying prices are down in both inner and outer ‘prime‘ areas.

Its latest market summary - based on repeat valuations of second hand stock and not including new-builds - says that in the year to March prices in prime central London dropped 1.2 per cent; over the most recent three months of that year, the fall was 2.4 per cent.

In prime outer London the annual fall was 3.1 per cent with the quarterly drop a smaller 1.1 per cent.   

In March around 80 per cent of Knight Frank’s prime outer London offices reports annual price declines while only around 20 per cent reported increases. 

Meanwhile in prime central areas, there was at least some consolation that the current price falls are smaller than those seen a year ago, and that the number of transactions in the year to March had risen six per cent - notably in the high-flying £5m to £10m price category.

For the outer areas, Knight Frank’s Tom Bill, head of London Residential Research, says: “Buyer caution around stamp duty remains a factor, as does political uncertainty. Higher rates of stamp duty appear not to be fully reflected in asking prices yet. The average number of days a property was on the market was 22 per cent higher in the year to March 2018 compared to the previous 12-month period, suggesting reluctance on the part of buyers to meet some asking prices.” 

Regarding prime central London’s performance he says: “Activity has risen and price declines have bottomed out as the market adapts to higher rates of stamp duty.” 

Last week we reported that Strutt & Parker predicted that, in a worst case scenario, prime central London average prices could fall a further five per cent by the end of 2018.