Bearing Down: How has the PCL sales market changed since 2014?

New analysis of 104 postcodes across PCL and SW London has painted a stark picture of how the capital’s prime property market has altered – or perhaps more accurately, been altered – since 2014…

Chelsea agency Maskells has charted values and volumes from Q1 2014 to Q1 2016 and reports, rather ominously, what financial markets would call “a key indicator of a bear market”.

The table below shows the number of postcodes which have seen an increase/decrease in average property value per SDLT band and the percentage of that increase/decrease.

A “bottleneck” at the £925,000 SDLT band is clearly having an effect, says the team, but the “biggest shock” is seen in the volumes.

The analysis shows a 41.3% drop for the £250,000 to £925,000 SDLT band across the 104 postcodes between Q1 2014 to Q1 2016. In the £925,000 to £1.5m band there was a drop of 47.8%, while the £1.5m range saw a massive fall of 58.2%. The only postcodes to see an increase in volume were SW20 9XX and SW8 5XX.

“This is important”, says the agency, “as rising prices which are not supported by rising volume are, in the financial markets, usually an indicator of a bear market”.

George Osborne’s recent warnings over a potential fall in prices if the UK votes to leave the EU are described as “a bit of misdirection, in our opinion, as the Chancellor seems to doing a fine job in achieving this reduction himself.”

Canny buyers may find a few deals around pre-23rd June, but are warned to “be under no illusion”…

“The property market has been fundamentally changed as a result of the Chancellor’s actions over the past 24 months” adds the report, “and his blaming further housing market turmoil on Brexit is just another poke in the eye to the market.

“Even with the bottleneck at £925,000 SDLT mark, demand for housing remains. It is time to accept this market as the ‘new’ normal. We are unlikely to see a spike in prices any time soon in Central and SW London – Brexit or no Brexit

“With hindsight, anyone looking to sell in the South East and London now and in the future, may well have preferred a Mansion Tax to the current situation.”

Bull Vs Bear

Cartoon via The Tax Haven (CC-BY-SA-2.0)