Headlines from March Report: UK sees lowest price growth since 2013
Prime Central London (PCL)
Brexit’s false dawn brings surge of activity
- Average annual prices in March (excluding new build) in PCL now stand at £1,848,282.
- Prices fall by 3.7% in Q1.
- Annual transactions stand at just 3,378, a fall of 15.7%.
- Quarterly transactions see a surge of 18.3%.
- New build average prices rise to £2,377,521, a 60.8% premium over existing stock.
- New build transactions stand at just 586, an annual fall of 18%.
Sales go on falling and falling
- Average prices in Greater London (excluding new build) now stand at £624,343.
- This is a monthly rise of 2.6%.
- Annual prices increase by just 1.4%.
- Annual transactions fall by 3.4% to just 87,368, 24.7% lower than at the EU Referendum in June 2016.
- New build prices now stand at £691,452, representing a 21.5% premium over existing stock and an annual increase of 15.2%
- However, new build transactions are falling much faster than existing stock, at a rate of 18.0% annually.
England and Wales (Excluding Greater London)
Weakest price growth since 2013
- Average prices in England and Wales (excluding new build) stand at £254,196.
- Monthly prices fall by 1.4% and quarterly prices fall 2.6%.
- Annual transactions continue to fall by 0.8% and now stand at 798,521.
- Quarterly transactions plummet by 14%.
- New build prices stand at £307,692 rising annually by 3.6%, representing a 15.1% premium over existing stock.
- New build annual transactions stand at 95,935, an annual rise of 5.2%.
- Quarterly new build transactions plummet by 24.3%.
For top-line commentary, please see below
Naomi Heaton, CEO of LCP, comments:
Prime Central London
Average annual prices in March for Prime Central London (PCL) now stand at £1,848,282. They have fallen 3.7% over the quarter. On an annual basis, prices hold with a modest increase of just 1.8%
Annual transactions remain just above the record low seen last month and now stand at 3,378, a fall of 15.7%.
Nevertheless, the run up to the initial Brexit deadline of 29th March saw shrewd buyers and investors push through deals whilst levels of competition remained subdued and sterling weak. As a result, transactions increased 18.3% in Q1.
It had been anticipated that following Brexit D-Day, there would be a clear roadmap for the UK to leave the European Union engendering a market revival. However, subsequent delays to our departure have created more uncertainty. This is unlikely to change materially until a clear decision is in the offing.
Average prices in Greater London for March are £624,343. This is a rise of 2.6% over the month, culminating in an increase of 1.4% over the year.
Unlike PCL, transactions in Greater London saw a fall in Q1 of 7.1% as concerns about the post-Brexit landscape continue to trouble a largely domestic market.
This cements the long-term trend of falling transactions with a drop of 3.4% over the year. At 87,368, they are now 24.7% lower than in June 2016, when the EU Referendum took place. It illustrates the devastating impact the ensuing uncertainty has had on the property market, coupled with numerous tax hikes since 2014.
If the current cross-party talks yield a compromise which can be ratified, then the prospect of a swift exit is still on the table. If not, we will see an extension of the limbo that not just the London housing market finds itself in, but the UK economy as a whole, with significant negative implications.
England & Wales (excluding Greater London)
Average Prices in England and Wales (excluding Greater London) stand at £254,196 for March. This represents a monthly fall of 1.4% and a fall of 2.6% for Q1. Growth levels on an annual basis remain at the lowest since 2013, standing at just 2.9%.
Annual transactions also remain weak and now stand at 798,521, down 0.8%. With a fall of 14% in Q1, this downward trend could be expected to continue for now.
The Brexit wobbles that have been evident in the capital for some time are now impacting on England and Wales. Buyers’ faith in the market has waned and sellers are beginning to question whether now is the best time to make a move. Average prices have fallen every month since last September.
In previous market cycles, London has often been an early indicator of what was to come for the rest of the UK. This may well presage more bad news to come for the domestic market.