The prime residential property market in London saw its first uptick in pricing in more than a year in Q4 2016, while transaction volumes showed signs of stabilising.
According to LonRes Quarterly Data, after falls following the EU referendum in Q3, there was an expectation prices would drop further. Instead, activity increased, and prices paid overall increased by 1.9%.
Head of research and data analysis Marcus Dixon said that while the market was undoubtedly still slow, there had been a greater acceptance of pricing from those who were serious about selling.
However, he warned that it was difficult to say whether the market had yet bottomed out, though it seemed a little more positive.
Transaction volumes are not increasing, but their rate of decline is slowing, and are closer to levels seen in 2015.
In Q2 2016, the number of properties sold across prime central London fell to half that of the same period a year earlier, in a 51% decline. Q3 2016 saw a 34% drop. However, by the fourth quarter, volumes were down only 13% on the year before.
LonRes said low volumes of sales have meant that stock levels in prime central London have increased over the course of the year, but volumes reaching the market have been lower so there have not been significant amounts of new stock flooding the market
Dixon said currency devaluation, more realistic pricing, and a need to stop sitting on hands were all having an effect.
However, he cautioned that : “Uncertainty surrounding the outlook for the economy and housing market has meant transaction volumes, while improving, remain lower than they were at this point a year ago, and few expect any significant change to prices in the coming months.”
Pricing for the prime market is 7.1% down on the 2014 peak overall. In the market over £5m, this falls to 15%.