London alarm - more price and supply problems hit prime areas

Despite optimistic reports on prime London’s housing performance from some sources in recent weeks, figures from subscription service LonRes paint a familiar downbeat picture.

LonRes splits prime London into three areas: all of them combined show that in the second quarter of the year prices were down 5.3 per cent compared with the same period of 2018.

This is despite a 3.3 per cent rise in the first quarter of this year.

LonRes’ worst affected sub-markets were what it calls ‘prime’ and ‘prime fringe’ which dropped 6.7 per cent and 6.6 per cent over the year. 

The average price achieved across the three LonRes prime areas in Q2 2019 was £1,183 per square foot.

The service says stock levels remain an issue across all three prime areas, with Q2 2019 being the fifth consecutive quarter to see a fall in the number of new instructions when compared with the same quarter a year earlier.

In Q2 this year there were 25 per cent fewer new instructions compared with the same period of 2018 and across the three LonRes catchment areas the total value of properties coming to the market this year so far - based on their combined asking prices - of properties coming to market tis a huge £3.1 billion lower than in the first half of 2018.

There was some consolation in transactions - the number of homes sold in prime central London over Q2 2019 was up three p[er cent on the same period last year, with much larger percentage rises seen for homes in PCL prices below £2m and above £5m.

But there was a 20 per cent plunge in the number of PCL properties sold in the £2m to £5m price bracket.

Off-market sales have boomed as a result, with 35 per cent of respondents to the LonRes Agent Survey reporting a rise in properties being launched off-market in Q2 2019, compared to nine per cent seeing a fall.