PCL Market Snapshot: ‘Recovery mode` continues as sales prices bottom out

Date Published 06 December 2017

Price declines are bottoming out as transaction numbers pick up, says Knight Frank – and there`s even been some price growth in the £5m-£10m bracket…

The average property price in Prime Central London is now 2.2% lower than it was a year ago, but the latest from Knight Frank indicates that there`s been a slight rise in the £5m-£10m bracket – it`s the first positive annual number since 2015.

Whats more, the three months to November delivered flat price inflation across the board; it`s the first non-negative quarter since April 2016, meaning that the annual -2.2% is the least-dramatic rate of decline since August 2016.

• Annual price change: -2.2%
• Quarterly (3 months to November) price change: 0%
• Sales volume: +10% in the six months to November

Overall, the PCL sales market `is moving towards recovery mode`, says the agency, with continued signs that price declines are bottoming out as asking prices align with what buyers are willing to pay.
It looks as though the top-end is leading any recovery in price performance: Average prices for homes worth between £5 and £10 million were 0.4% higher this November, while average values for £10m+ homes were -2.1% on the year, a more modest rate of decline than the -3.1% fall for homes worth between £1m and £2m.

10% more deals were done in PCL in the six months to November, according to LonRes data, although Knight Frank says that it `doesn`t expect sales volumes to improve in a meaningful way until the market adjusts fully to higher transaction costs`.

PCL`s `recovery mode` has seen `a cautious re-emergence of buyers in the market`. KF reports a 2.8% rise in the number of new prospective buyers registering between January and October 2017 compared to the same period last year, while viewing levels were up 8%.
But prime stock levels are slipping; the number of Rightmove listings above £2m in PCL between January and October 2017 was down by about 17% compared to the same period in 2016…

Source: Prime Resi 6th December 2017