LCP comments on Land Registry HPI for January 2016

London Central Portfolio has released their detailed annual market report, looking at the latest price trend data, 2016 predictions, how PCL compares with the rest of London, the UK and with global financial indices.

Prime Central London
Land Registry HPI reports continued annual growth in January 2016 in the two most central boroughs, following on from last year’s rolling annual growth of 5.2%.
Annual % change in City of Westminster: 6.9% up from 6.1% in December
Annual % change in Royal Borough of Kensington and Chelsea: 5.7% up from 3.6% in December

Naomi Heaton, CEO of London Central Portfolio, said:

“The growth reported by Land Registry HPI in January is consistent with LCP’s projection that 2016 will see a similar performance to 2015. The continuing changes in taxation and the imminent uncertainty surrounding Brexit will suppress prices. However, the fall in Sterling, which is likely to continue at least until June, will also attract international buyers into the market as property prices appear to be comparatively ‘cheaper’ ”.

Greater London
Greater London has seen the strongest percentage annual change in growth this January within in the UK at 13.9%.
Every borough in Greater London saw monthly price growth except for Camden and Islington, which both saw falls of -0.4%.

Heaton, said:

“Greater London’s overall performance is consistent with LCP’s projections that Q1 2016 would see a short-term spike of ‘fire-sales’ as domestic sellers tried to off-load before the new 3% additional Stamp Duty for buy to let property and second homes comes into play in April.

“It is likely that this growth will not be sustained during the course of the year as the market continues to battle with affordability due to mortgage caps and the 3% additional rate stamp duty affecting more people than originally anticipated.”

England and Wales
England and Wales has also seen a strengthening in prices with the year on year increase in January amounting to 7.1%, up from 6.4% in December. Average prices now stand at £191,812.
This increase is buoyed by the very strong increase in Greater London (13.9%). The North East, for example, saw price growth of only 0.2% and a fall in monthly prices of -1.6%.
It appears that with the continued and projected low levels of interest rates that property is becoming more affordable for existing homeowners with all regions experiencing a fall in repossessions with just 346 nationwide, compared with 753 the year before, in the last reported month.

The CEO of London Central Portfolio commented:

“The growth in England and Wales will be very welcome for many homeowners wanting to trade up as there has been no price uplift from November 2007 (£180,880) to June 2015 (£180,580). It is only in the last 6 months that HPI index shows a genuine price increase since the credit crunch with price growth of 6.1% (June 2015 – January 2016) being recorded.”