Just 64 deals a week in Prime Central London last year

Full-year data from Land Registry reveals all-time low for transactions as prices hit all-time high

The final tranche of 2016 data has come in from the Land Registry and PCL’s transaction count has been confirmed at 3,330 – the lowest 12-month total on record, half the volume registered two years ago and a weekly average of just 64 deals a week.

Unlike in other regions, PCL transaction levels did rally in the final three months of the year (especially in RBKC), with an additional 118 sales representing a 19% improvement on Q3, although 2016’s total still ended up down 29% on the previous year.

Analysis of the laggy stats by London Central Portfolio puts the average price across PCL (defined as Westminster and RBKC) at £1,818,262 at year-end – the highest on record – after values rallied by 14% in Q4.

Greater London’s transaction levels stayed low, meanwhile, with a 29% fall over the same quarter in 2015, a 6.3% fall over the previous quarter and a 21% fall over the year.

Average prices in the capital now stand at £584,694, said LCP, down 3% since the beginning of the year but up 5.7% overall on the previous year.

England & Wales also saw weak sales volumes in Q4, with a 17% fall over the same quarter in 2015, a 6.6% fall over the previous quarter and an 8% fall over the year. The average property price now stands at £278,167, down 1.1% since the beginning of the year.

Naomi Heaton, CEO of LCP: “Having taken a big knock following last April’s new Additional Rate Stamp Duty and the shock of Brexit, evidence of a recovery in  PCL in Q4 is positive news. As an international buying market, the weakness in sterling, combined with the Trump-effect and increasing instability in Europe, appears to have drawn investors back to PCL as a safe haven asset class. The uptick has been led, in particular, by Kensington and Chelsea which saw a 24% quarterly increase in prices.

“As with PCL prices, sales volumes saw a recovery at the end of last year. Whilst transactions remain significantly down for the year as a whole, lower even than the depths of the Credit Crunch, Q4 reflected a 19% increase in sales compared with Q3, albeit from a very low base. This is notable, however, as it is bucks the seasonal trend where volumes typically tail-off in the quieter pre-Christmas period. It is our expectation that sales numbers will continue to harden gradually as the initial shock of Brexit and tax changes wash through.

“Despite Government initiatives to support buyers with reductions in basic rate Stamp Duty and their flagship Help to Buy scheme, it appears the domestic market is still struggling. Salary caps on mortgage lending, which do not reflect the ratio between house prices and earnings, are hampering buyers to get on the housing ladder and their ability to trade up. This has been exacerbated by the failure to meet affordable housing targets, a trend which shows little sign of reversing.”

 Summary of LCP’s analysis of just released full year data from Land Registry

2016 Q4

PCL

Greater London

England and Wales

Actual Average Price

£1,818,5620

£584,695

£278,167

% Change vs Q3

+14.3%

+2.4%

-1%

% Change vs Jan 2016

+8.6%

-3.0%

-1.1%

% Change vs Q4 2015

+10.8%

+5.1%

+1.3%

% Change 2016 vs 2015

+3.8%

+5.7%

+2.1%

Actual Volume of Sales

3,330

82,172

775,037

% Change vs Q3

+19.0%

6.3%

-6.6%

% Change vs Q4 2015

-33.2%

-29.4%

-17.2%

% Change 2016 vs 2015

-28.6%

-20.8%

-8.1%