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As the prime London market is entirely separate to the "standard" non-prime London market, I thought it would be worth starting a new micro thread to focus on this.Although few PT members will likely be involved in this market, it is important to monitor it imho, as what happens here will have a knock-on effect on the rest of the capital's market, and this "ripples out" into the South East and beyond - London being an economic powerhouse and generator of wealth for the entire country.There have been a number of concerns expressed in the media that the prime London market is exhibiting significant price drops.Excerpt from recent article:The foreign investor market in London is on its knees – with ‘hundreds’ of buyers of homes purchased off-plan over the last four years nursing huge losses.
The problem, says one large London agent, has been ‘massively under-reported’ by the media.
However, EYE can confirm that with values of such properties having dropped like a stone, some investors are unable to complete on their purchases.
Others are having to sell at almost a one-third loss to avoid having to hand back distressed properties to developers, and then risking legal action and greater losses.Full/source articleToday, the Guardian is running this article:Want to sell your luxury London home? Then take £1m offOwners of luxury London properties are having to knock more than £1m off their house prices to sell them because super-rich overseas buyers are giving the UK a wide berth due to “eye-watering” stamp duty and uncertainty surrounding Brexit.
Mayfair-based property buying agent Garrington said homes in the capital’s most exclusive neighbourhoods have been reduced in price by an average of 9%. In Knightsbridge, the most expensive area, prices have been cut by an average of 12% – £927,000.
Jonathan Hopper, managing director of Garrington, said sellers are having to take drastic action to realise the value of their homes. “There is huge discounting of super prime properties above £5m at the moment,” he said. “A lot are being discounted by 10 or 20%.
“Acute price sensitivity among buyers continues to force sellers to reduce their expectations, and in the most expensive areas this is throwing up some striking discounts.”More than three quarters of homes have been on the market for more than six months.Full/source articleLast month, the Royal Institution of Chartered Surveyors (RICS) warned that prices in London and the south-east would decline next year as a cautious approach remained the priority in Britain's property market.
The data was consistent with figures released by property website Rightmove, which showed the cost of homes in the capital fell by 4% in 2017, with a further 2% drop expected over the next 12 months.Full/source articleSome commentators are saying the market is showing signs of stabilisation although many analysts are not expecting a significant uplift in prime London property prices until 2020.I will be up-dating this thread regularly and welcome all comments and views and any first hand experiences of PCL.SEE ALSO - Spotlight: London investment property marketUP NEXT - What are the limits of London's commuter belt?DON'T MISS - Journey of a Centralish London development project - warts and allNOW WATCH:
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The number of homes sold in London’s most expensive postcodes dipped by 3.6% last year.
That’s according to new figures from property data provider Lonres.
Transactions were down by 3.6% in 2017, as compared to the year before, Lonres numbers suggested.
The drop in activity for homes priced below £2m was particularly marked, it said.
The number of viewings on properties in “prime” London increased, as did the amount of time a property spent on the market before finding a buyer.Full/source articleHigh-end homes in central London are selling at the biggest discounts in more than a decade as sellers continue to set ambitious prices even as the market declines.In 2017 homes in the most exclusive postcodes were sold at an average discount of 10 per cent or more on their initial asking price, according to figures from LonRes, a research company.The gap between what buyers will pay and what sellers ask for their homes in this segment of the market is now greater than it was in either 2008 or 2009, following the financial crisis. Marcus Dixon, head of research at LonRes, said buyers were becoming more confident in demanding discounts and sellers were more likely to accept lower offers.“People are going in with relatively cheeky offers, and sellers are accepting them,” said Mr Dixon.“There’s a bit of realism creeping in about what properties are worth.”LonRes’s data cover London’s most exclusive districts, including Kensington and Chelsea, as well as prime parts of the capital extending from Canary Wharf in the east to Richmond in the west and Hampstead in north London.Full/source article
Savills are predicting a 2% drop this year in PCL.
However, boroughs in Z3-6 may rise 3%
Data from [construction analysis consultancy] Molior has found rising levels of unsold development properties in prime London, with 1,500 complete but unsold properties on developers’ books – up 35 per cent year on year.
How Prime is connected with the rest of the country is an interesting topic in it's own right, and even the definition of "Prime" is a debate. As someone who rents in the middle of the market in SW1 I can say with some authority that the crisis reported is being overstated. There may be a crisis in the niche of safe havens for billionaires and oligarchs but for your average millionaire it's business as usual, with the annual seasonal variations of more significance than any booming or crashing.All property prices link - when prices get silly in Mayfair you buy in Pimlico and walk. When prices get silly in Pimlico you live in Brighton and take the train to Victoria etc etc. so I agree with the concept that next year you will see what happened in Mayfair impinge upon Teeside, however I'm not sure that it will be significant enough to change your business plans for.
Average rental values in prime central London fell 2.1 per cent in the year to February according to Knight Frank - and the letting agency says rents in that area have been dropping now for two full years.Full/source article
I'm surprised it's only 2.1%.
In the outer borough's it's more like 5-10% imo.
wow 10% Dom that's one hell of fall
we live in interesting times
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Pricing on prime central London (PCL) properties has “more than” adjusted to take into account the higher transaction costs with average asking prices discounted by up to 10%, Knight Frank claims.
The agent’s February PCL Sales Index highlights LonRes data showing that the average asking price reduction for sales between £1m and £5m was 9.9% in the year to February.
Knight Frank could not say whether these discounts have led to sales, but there was a 2% increase in its own sales volumes in the year to February.
The number of prime properties on the market also increased 5.4% over the same period.Full/source article
Average prices dropped another 1.1 per cent in prime central London in the year to March according to new figures released by Knight Frank - meaning prices are now 8.0 per cent below their previous peak reached in August 2015.
In addition, the average asking price reduction for properties between £1m and £5m was 9.9 per cent in the year to February. Full/source article
Coutts bank has issued a starkly pessimistic snapshot of prime London’s housing landscape, reporting price falls, valuation mark-downs and slower sales in a market which it describes as “bumping along the bottom.”
First off it says prices have fallen three per cent in the first quarter of 2018, reversing a rise reported in the previous three months. “Prices appear to be bumping along the bottom of the market, 14 per cent below 2014 peak values” the bank reports. Full/source article