London Central Portfolio, a respected property consultancy that has been pessimistic about the market in prime areas of the capital, says there may be signs of a change for the better.
On the face of it, the latest LCP figures are not a cause for celebration.
Annual transactions in prime central London in May stand at just 3,282, a drop of 14.2 per cent annually, with just 63 sales per week.
However, LCP says that whilst this is an almost 40 per cent fall on pre-Referendum levels, the momentum seen since the beginning of the year continues with quarterly sales rising by 37.9 per cent - the largest increase in activity for over two years.
Average annual prices in this super-expensive enclave reached a record high of £1,913,040.
Quarterly prices also increased by 13 per cent, pushed up by the sale of several high-value properties in March and April although it admits growth subsequently flatlined in May.
Naomi Heaton, LCP chief executive, says: “The wait and see attitude, endemic since the EU Referendum in 2016, appeared to start turning ahead of the Brexit deadline of March 29 with investors wanting to capitalise on weak sterling and discounted prices.
“Whilst the extension of the [Brexit] deadline appeared to have initially dampened investors’ enthusiasm, there has been a notable change in market sentiment and several estate agents are reporting improved trading conditions. It would appear investors are no longer prepared to sit on the side-lines whilst the UK makes up its mind.
“Historically, the prime central London market has bounced back swiftly when sentiment improves, so the window of opportunity to cut a good deal at rock bottom prices could well be a small one.”
Meanwhile across Greater London as a whole, average prices for May reach a record high of £628,283.
This represents a rise of 1.7 per cent over the month and an increase of 3.2 per cent over the quarter.
LCP says transactions over the last quarter have also seen an improvement with a rise of 13.8% per cent. However, on an annual basis the total volume of sales stands at 86,338, which is a fall of 3.2 per cent.
The consultancy reveals that Greater London is into its fifth year of falling transactions, with a total drop of 27.4 per cent since 2014.
“Higher purchase costs, political uncertainty and short-sighted policies aimed at winning easy votes continue to hamper recovery” explains Heaton.
“With the Conservative leadership contest ongoing and the prospect of a hard Brexit, what the rest of the year will bring and its impact on the housing market is hard to predict. Nevertheless, it appears that investors, if not domestic home buyers, are increasingly unwilling to wait” she adds.
