Quarter three was the first time in four years that property prices have declined continuously in the UK, dropping 0.5 percent to provide an average property value of £214,140, down £1,000 compared to June. However, findings show that these recordings were still up from the previous year’s quarter three, despite the continuous decline, by 5.7 percent. Compared with quarter two, prices were down 6.8 percent, with London seeing drops of 2.5 percent.
New home registrations in the UK have also seen a fall, with 15 percent fewer homes across the UK, and 62 percent less in London. Following the initial concern and scepticism of the market, buyers have started to make an appearance in the last quarter of this year, with the average property entering the market at £309,122, up 0.9 percent from last month and London increasing by 2.4 percent with an average of £645,833.
With confidence rising among buyers, and predictions of a 3.3 percent year on year house price growth for the next five years, from the Royal Institution of Charted Surveyors, the first halt and slow of house price growth appears to be behind us. Following the EU referendum, the annual growth rate of 9.7 percent fell to 8.3 and the nation kept a close eye on the market as buyers pulled out of transactions and saw prices begin to rise again in August by 0.6 percent and 12.3 percent in London.
International buyers were extremely active during this time, taking advantage of the Sterling value decline and Americans benefitting from discounts of up to 10 percent on property. The decrease in the value of Sterling has also led to intense asking price negotiations, with buyers saving an average of £25,000 compared to the average discount of £4,000 in January.
With some locals struggling to locate the perfect property at an affordable price, the number of rental properties available on the market is growing, and the number of people renting has also increased and is at a record number in almost 80 years. However, potential tenants are cautious to find the right property, with a five-time viewing average and negotiations reduced. Only 24 percent of residents managed to negotiate a lower rental price, and the average tenancy is currently 18 months.
Prime Central London Outlook
Mayfair is currently boasting a £750 million value residential market, according to a new report from Wetherell. With 25 percent more properties available than in 2015 and 67 percent more than 2014, there were 161 listings at the beginning of August this year. Of these, there were 37 percent fewer houses available compared with last year, but 40 percent more flats. Buyers can also benefit from the fact asking prices have been decreased on 45 percent of flats and 36 percent of houses, since the initial entry onto the market. Although the achieved asking price on properties sold so far this year is down from last year, this drop is only three percent, from an average of 92 percent to 89 percent.
Transaction volumes are unsurprisingly down, however perhaps surprisingly, the least significant fall has been experienced in the £10 million and over market when compared to the rest of the prime central London market. With a 19 percent decline in sales at the high-value end of the Mayfair market, the rest of London has seen 32 percent fewer sales. This decline is a 35 percent fall from 2014, on property at £10 million and over, but a 44 percent fall on property priced under £10 million.
With an extensive range of properties available in the £10 million and over market and the number of properties in this price range increasing by 25 percent since August alone, prime central London remains strong. With a lot to offer and an insignificant fall in asking prices achieved, buyers and sellers in Mayfair are in an excellent position.