PCL deal number rally as asking prices fall at the end of the year

November was the second highest month for sales volumes in 2016, says Knight Frank

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