Residential property deal numbers have “risen steadily” over the last few months, as asking prices become more realistic to match more subdued levels of demand. As a result, Knight Frank reports that November was the second highest month for sales volumes in 2016 (after a stamp duty spike in March), accounting for 14.1% of all deals so far this year.
Transaction volumes are still well-off last year’s pace, but the gap is narrowing: from 38% down year-on-year in June, to 19% lower in November.
While this resurgent activity is no sure indicator of a busy year ahead – there are plenty of political and economic hurdles in the way of that – KF’s Tom Bill argues that “one lesson from 2016 is that sufficient pent-up demand has formed in some markets for buyers to act when they perceive good value.”
Average property values in PCL dropped by -6.3% in the year to December 2016, and the feeling is that 2017 will be broadly flat for house prices, as many agents and pundits – including Knight Frank – call a shallow bottom to the market.
Chelsea has seen the biggest price declines in Prime Central London through 2016, while the more up-and-coming City & Fringe area managed to top the growth table with a less than inspiring 0%. The impact of higher-rate SDLT becomes clear – again – when looking at how price bands have been affected; sub-£1m homes have fared significant better than those in the upper tiers (although prices have still fallen)…
Price growth by price band and property type