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Latest London Prime Property Index

Feb 10th 2020

Coutts’ latest report on luxury property in London finds prices rising fast towards the end of last year as the UK election result and move towards Brexit certainty boosted buyer confidence.

Luxury property prices across the city rose 5.3% over 2019, but 4.8% of that came in the final quarter alone. Demand is also on the up, with 10.1% more places sold in the last quarter of 2019 than the last three months of 2018. As Brexit-related worries eased, overseas buyers will have been motivated to move quickly while sterling remained under pressure.

Meanwhile, the number of high-end houses displaying ‘For Sale’ signs is extremely low and continues to drop, falling -8.9% in the last quarter of 2019. There are now -11.8% fewer prime properties for sale on the open market compared to a year ago. New listings also fell by -16.5% in the last three months of last year, and have more than halved since the market high back in the summer of 2014.

CHISWICK
•  Despite all this, it remains a buyers’ market, with prices still lagging the 2014 peak by -11.1%, and properties in some pockets of London, such as Hammersmith & Chiswick, selling for -19% less than they were then.
•  In Hammersmith & Chiswick over 55 per cent of prime properties are selling at a discount – typically 8.8 per cent off asking price.

SELLERS LESS LIKELY TO BUDGE ON PRICES
•  Fewer luxury properties are being sold at a discount too, as sellers aware of the lack of choice stick to their guns on asking price.
•  Only 41.9% of prime London property sold at a discount in the last quarter of 2019. This is the lowest figure we’ve seen since we started researching the market in 2016.

CENTRAL LONDON BOUNCES BACK
•  Prices in traditional prime central locations such as Mayfair & St James’s, Knightsbridge & Belgravia, Kensington, Notting Hill & Holland Park, and Chelsea have all risen in 2019.
•  Sales activity in these markets has increased significantly compared to a year ago. For example, prime property transactions in Knightsbridge & Belgravia are up 64% compared to a year ago.
•  Knightsbridge and Belgravia also had the most super prime sales in Q4 – properties worth £10 million or more – closely followed by Mayfair & St James’s.

Katherine O’Shea,Coutts Real Estate Investment Service: “Competition among buyers is likely to increase this year, putting further pressure on prices.

“Historically, the number of properties put up for sale has usually improved in the first quarter of the year, so we would expect more homes to come on to the market over the coming months. But the number of buyers is also likely to rise as the political uncertainty of the last few years continues to unwind. This increased demand could push prices higher.”