Greater London prices breach £600,000 mark – LCP

The average property prices in Greater London have bypassed the £600,000 mark for the first time, according to LCP’s Land Registry analysis.

Greater London prices now stand at £600,076, a growth driven by record lows in mortgage rates and beneficial falls in basic rate Stamp Duty.

That’s a 14% increase over 2015 and 7.9% over last quarter. Volumes of sales were also up 3.9% compared with the end of last year, according to LCP.

Naomi Heaton, CEO of LCP, commented:

“Whilst making for somewhat staggering reading, the increase in sales is not actually surprising.

“Buyers, wanting to access the PCL market, rushed in during Q1 to beat the 3% Stamp Duty deadline which created an uncharacteristic surge.

“This one-off anomaly is likely to be steeply eroded next quarter.”

The data also reflected “an encouraging start” to the year for Prime Central London (PCL) property, with prices rising by 4.7% year on year and 2% versus the previous quarter to stand at £1,673,906 on average.

Transactions had also increased by 33% over one quarter.

LCP anticipates prices to soften as transactions plummet as an effect of the pre-referendum jitters and the global economic uncertainty but suggests the pre-Brexit market would still offer plenty of opportunity for investors.

Ms Heaton continued:

“Central London slows down in the face of investor uncertainty; all the evidence*, however, suggests that the market rallies quickly thereafter.

“To capitalise on the current conditions, purchases should be focused on the sub-£1m sector of the PCL market. This has been far less affected by recent tax changes and future price growth is expected to be robust.”

Across England and Wales (excluding Greater London), prices have fallen 0.87% over the preceding quarter, with average prices now standing at £235,844.

Sales volumes had also fallen 4.5% versus the previous quarter.

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* For example after 911, during the Iraq war and in the face of a weak stock market in the early 2000s. But the market recovered quickly, particularly at the lower price points. In 2010, prices bounced back post credit crunch by 22.7%, following a fall of 16.3% the previous year.