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  • Property Prices

    LCPAca Residential Index - November 2018



    The LCPAca Residential index provides a comprehensive dataset, tracking residential property prices and transactions within England & Wales, Greater London and Prime Central London.

    It is based on every transaction for full market value recorded by HM Land Registry in England & Wales, including prices of properties bought with cash and new builds, as opposed to statistics based on asking prices, mortgage approvals, or selective samples.

    Headlines from November 2018 Report

    PRIME CENTRAL LONDON (PCL)


    Prices & transactions continue to fall

    • Average annual prices in November (excluding new build) in PCL now stand at £1,859,365.
    • Monthly prices fall by 2.7%.
    • Quarterly prices fall by 5.9%.
    • Annual transactions fall 14.7% to 3,703, down over 45% on 2014.
    • New build average prices now stand at £3,390,716 representing a premium of 72.7% over existing stock.
    • However quarterly transactions fall by 44.2% to just 133.

    GREATER LONDON

    Lowest price growth since the Global Financial Crisis

    • Average prices in November (excluding new build) in Greater London now stand at £625,457.
    • Quarterly prices fall 0.4%.
    • Annual prices rise by just 0.8%, the lowest growth since the Global Financial Crisis.
    • Annual transactions continue to fall to just 90,106, a drop of 4.1%.
    • New build transactions see far greater falls at 19.6% over the year.
    • New build prices now stand at £734,701, a 20.2% premium over existing stock.

    ENGLAND AND WALES (EXCLUDING GREATER LONDON)

    Market flounders as Brexit uncertainty bites

    • Average prices in November (excluding new build) in England and Wales now stand at £257,666.
    • Monthly prices fall by 1% and quarterly prices fall by 3.1%.
    • Annual prices increase by just 2.4%, the lowest growth since 2013.
    • Annual transactions now stand at 807,503, a further fall of 1.0%.
    • New build prices stand at £297,986 representing a 15.0% premium over existing stock.
    • New build transactions have increased annually by 4.5% but fall 2.5% over the last quarter.

    Click here to download the full report...

    Naomi Heaton, CEO of LCP, comments:

    Prime Central London

    Average annual prices in Prime Central London (PCL) in November now stand at £1,859,365. They have fallen 2.7% over the month and 5.9% over the last quarter.

    Annual transactions stand at 3,703, just above 71 sales a week. This represents a fall of 14.7% over the year and is the eighth consecutive month that annual sales have dipped below 4,000. To put this into context, transactions during the Global Financial Crisis (GFC) fell below this figure for only four months.
    The historically low levels of transactions are now not only having a tangible impact on estate agents, but also the Treasury. The revenue from Stamp Duty for the first three quarters of 2018 is down by £685m on 2017.

    These already low and falling levels in transactions and prices have, no doubt, been exacerbated by the toxic atmosphere created by the UK Brexit negotiations. The recent leadership challenge, whilst voted down, can only add to uncertainty.

    There is, however, a significant weight of capital poised to make its move. There is clear evidence that more experienced investors are returning to the market to capitalise on extremely discounted prices and sterling depreciation. There have been several instances in recent weeks where assets have attracted competitive bids and transacted in a matter of days.

    It is possible that this is the first sign of a long awaited bounce back.

    Greater London

    Average prices in Greater London now stand at £625,457. Prices have fallen 0.4% over the last quarter. They have stagnated over the year with a nominal increase of 0.8%. This is the lowest level of growth since the Global Financial Crisis and the current political climate is hardly conducive to any upward movement.

    Transactions on an annual basis now stand at 90,106, a drop of 4.1% over the year. They have fallen over 26% since the introduction of the 3% Additional Rate Stamp Duty on second homes on 1st April 2016.

    Whilst investors may be motivated to buy into a globally attractive market when prices are softening, for the majority of domestic buyers this is not good news. Coupled with the Brexit chaos and its implications for the local economy, one can foresee continuing falls in transactions and price stagnation.

    England & Wales

    England and Wales (excluding Greater London) is showing the same price suppression as the capital with a third consecutive monthly fall in value. Average prices now stand at £257,666 and fell by 3.1% over the quarter. Annual growth at just 2.4% is the lowest since 2013.  

    Transaction levels throughout England and Wales also continue to fall and now stand at 807,503, a drop of 1.0% over the year. It appears that we are now seeing the uncertainty that has been permeating the London market spreading to the rest of the UK as we approach the Brexit D-Day.   

    With transactions falling, average prices stagnating, a series of residential taxes over recent years and a deferred vote on the current Brexit deal, the UK housing market is in the middle of a perfect storm. Without a clearer picture of what to expect after 29th March 2019, it is unlikely that there will be any material change to the status quo.

    Click here to download the full report...

    SEE ALSO  -        Effects of Brexit on housing demand

    UP NEXT -            BrExit - impact on property market

    DON'T MISS -       Property market predictions for 2019

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