Stability in the Prime Central London Property Market

August 6, 2018



The central London residential property market is holding steady, with prices remaining mostly unaffected for the past 12 months. Whilst growth overall is still marginal, prices across the prime central London market rose by 0.1% on average in the second quarter, making it the second consecutive quarterly increase for the first time since 2015 and suggesting long term confidence in the market. Prime homes in the £5 to £10 million segment have increased 1.1% year-on-year, following a 1.2% increase in May 2018.

Although homes valued at £5million to £10million were the only segment with a positive price growth, stabilisation across the whole luxury market in Central London is under way according to Knight Frank residential research. With asking prices now fully reflecting the extra 3% of stamp-duty levied on second-home buyers in April 2016, the number of new buyers registering with estate agents has risen by 13% in the period between January 2016 to May 2018.

Similarly, outer London has also seen strengthening demand for prime property, with the ratio between new prospective buyers and new property listings rising to 5.7% this May. However, location currently seems to be a secondary indicator of performance within London, with the exception of Marylebone, which is currently considered as the most robust local market. Average values in this prime central London ‘village’ have fallen just -2.6% in the past year and -6.4% since peak, according to the Savills index, significantly outperforming the prime central London average.

With ongoing talk of the Brexit negotiations, it is likely that the central London market will remain subdued and steady, experiencing only minor fluctuations as we move through each quarter until further certainty. Buyers will now be looking out for potential interest rate changes, given their need for borrowing, especially those hoping to acquire property in the outer prime London markets. The governor of the Bank of England, Mark Carney, has commented that less-successful Brexit negotiations may be followed by an increase in interest rates to match rising consumer prices. This may, in turn, drag down the housing market around the capital.

Some locations in Scotland, the Midlands and the North of England are seeing stronger growth, with prime property prices in Edinburgh increasing by 7.5% and by 2.5% in Glasgow, according to the Savills prime regional index.

This article was written by Matthew Dailly, Managing Director of specialist bridging loan and development finance broker – Tiger Financial.

About Tiger Financial:

Tiger Financial is whole of market bridging finance broker with over a decade in the market. Their team works to provide short term property funding solutions across the whole of the UK, offering bespoke and flexible lending terms. Using their well established network of trusted lenders, complimented by an exclusive stable of high net worth individuals and family offices, they strive to get your project funded, even when most lenders say no.