- Prime central London prices rise by 0.7% in September
- Monthly growth pushes annual rise to 10%
- Quarterly pace of growth slows to 1.7%
- Knightsbridge, Hyde Park and Marylebone all outperform with annual growth of more than 14%
This growth in prices has taken place despite the impact of the March budget’s 40% rise in the top rate of stamp duty together with new, and still undefined, rules for an annual charge on £2m+ properties held in certain ownership structures and the reform of non-resident capital gains tax rules.
But the budget tax changes have had an undeniable impact on activity levels in the market, with the volume of sales in the £2m-£5m sector falling 20% in the three months to September compared to the same period in 2011.
Sales volumes above this bracket have been more robust, and there has also been a strong 23% rise in sales volumes for homes worth up to £2 million.
The sub £2m bracket is also where price growth has been strongest, with an annual increase of 11.6%.
Despite the weaker transaction volumes in the £2m-£5m bracket, the number of prospective buyers has been fairly evenly matched with available properties across all price bands.
It is worth noting however that over the last six months, stock volumes have slowly begun to creep upwards, and are now around 10% higher than in September last year.
The strongest markets in central London have been those areas located around Hyde Park, with higher than average price growth recorded in Knightsbridge, Hyde Park, Marylebone and Belgravia over the past 12 months.
London’s market performance continues to be aided by overseas buyers, who account for 41% of buyers in the £1m+ prime London sector, and more than 50% of buyers in the £2m+ market.
This overseas demand is driven by Russian, Indian, Italian, US and French buyers – reflecting the diversity of the market.
