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Price falls across prime London continue to slow. The first quarter of 2019 saw a fall of just 0.3%, leaving prices 2.5% lower than a year ago. This is encouraging given the ongoing political turmoil, which remains the biggest challenge in the market according to our agents. While stock levels are subdued, applicants and viewings have increased in the first quarter of this year, suggesting buyers see value in the market but are reluctant to commit until after Brexit.
Price expectations of buyers and sellers have narrowed, keeping the market moving, while location and condition continue to be key selling points. With competitive mortgage rates and a currency advantage for overseas buyers, Brexit
negotiations will be pivotal to the market going forward.Prices in the most expensive and established prime central
London markets fell by an average of 0.6% in Q1 2019, leaving them 3.7% below a year ago and 19.4% lower than their peak, in June 2014. However, this is the second quarter of slowing price falls in a market that is increasingly good value. Uncertainty surrounding Brexit has seen lower levels of stock brought to the market, which has restricted activity levels.
The prestige of central London property remains. It is still considered a safe investment with buyers, particularly those from Europe, the Middle East and North America who benefit from sterling’s weakness as well as price adjustments.
Price monitorKey statistics for
house price growth
Quarterly price movement across the prime London housing
markets for Q1 2019
Quarterly price movement across the prime central London housing
markets for Q1 2019
Average change in prices for property
worth £10m or more in the prime markets of central London,
since 2014 peak
Average change in prices for property in the prime markets of central London, since
2014 peak
-0.3%
-0.6%
-21.3%
-19.4%
5-year growth
Prime London prices Ongoing Brexit negotiations continue to affect prices across the region
Quarterly growth
Annual growth
Prime central London
Prime North West London
Prime South West London
Prime West London
Prime North & East London
All primeLondon
Source Savills Research
Source Savills Research Note Prices to March 2019
-19.1% -9.6% -8.9% -10.2% -2.7% -11.6%
-0.6% -0.8% 0.1% -0.1% -0.5% -0.3%
-3.7% -4.1% -1.1% -2.3% -2.5% -2.5%
Source Savills Research Note Prime property values to March 2019
MARKETIN
MINUTES
Savills Research
Prime Central London
UK Residential – Q1 2019
Brexit continues to cause uncertainty
KensingtonAv. £ per sq ft £1,600Quarterly growth 0.0%Annual growth -1.5%5-year growth -20.8%
MaryleboneAv. £ per sq ft £1,600Quarterly growth -0.4%Annual growth -5.4%5-year growth -7.8%
KnightsbridgeAv. £ per sq ft £2,100Quarterly growth -0.9%Annual growth -3.5%5-year growth -17.2%
WestminsterAv. £ per sq ft £1,400Quarterly growth -1.9%Annual growth -6.5%5-year growth N/A
PimlicoAv. £ per sq ft £1,100Quarterly growth -1.9%Annual growth -6.8%5-year growth N/A
Notting HillAv. £ per sq ft £1,600Quarterly growth 0.3%Annual growth -0.9%5-year growth -18.2%
MayfairAv. £ per sq ft £2,300Quarterly growth 0.0%Annual growth -2.5%5-year growth -23.7%
South KensingtonAv. £ per sq ft £1,800Quarterly growth -0.8%Annual growth -4.4%5-year growth -20.0%
BelgraviaAv. £ per sq ft £2,100Quarterly growth -0.7%Annual growth -3.6%5-year growth -16.4%
Earls CourtAv. £ per sq ft £1,300Quarterly growth -0.5%Annual growth -4.2%5-year growth -18.9%
ChelseaAv. £ per sq ft £1,600Quarterly growth -0.9%Annual growth -4.9%5-year growth -21.8%
Holland ParkAv. £ per sq ft £1,900Quarterly growth 0.1%Annual growth -1.0%5-year growth -15.3%
We are forecasting a relatively subdued market across prime central London as Brexit negotiations continue and we then enter a transition
period. However, low levels of available stock should help to prevent any further significant price falls.
Once uncertainty clears, there is the
potential for pent-up demand from those currently sitting on the fence to lead to more activity. However, this may not translate into immediate price
increases. Especially as, in the past, the currency advantage on offer has led those denominated in foreign currency to buy back into central London.
Across prime central London, the most expensive properties have seen the most significant price adjustments. Those worth £10 million or more, where values average £2,800 per sq ft, have fallen by 21.3% since their peak in 2014. However, prices have held steady throughout the first quarter of 2019.
Similarly, the well-established central London district of Mayfair, where sq ft values now average £2,300, has seen prices fall by 23.7% in the last
five years. These, too, have remained flat in the three months to March.
By contrast, over the last year, prime markets such as Westminster, Pimlico, Earls Court and Marylebone have seen prices fall the most.
As more established markets have begun to look like good value, demand has focused back to core central London locations, though opportunistic buyers have continued to cast their net wider.
As more established markets have begun to look like good value, demand has focused back to core central London locations
Prime central London in focus
Fall into line Price falls for the top end of the market have slowed
Pri
ce m
ove
men
t
Price range
Under £2m £2m-£3m £3m-£5m £5m-£10m
0%
-5%
-10%
-15%
-20%
-25%
Key Annual Since 2014 peak
Source Savills Research
£10m+
OUTLOOK
Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK, continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.
Please contact us for further information
Gaby FoordAssociate,Residential Research+44 (0)20 7299 [email protected]
Frances ClacyAssociate, Residential Research+44 (0)20 7409 [email protected]
Lucian CookHead of Residential Research+44 (0)20 7016 [email protected]
Phillippa Dalby-WelshCo-Head of Prime Central London Residential Sales+44 (0)20 7731 [email protected]
Please contact us for further information
Savills teamSavills team
Prime London house price forecasts Growth will return in the medium term
Prime central London
Other prime London markets
2019 2020 2021 2022 2023 5-year
-1.0% 0.0% 6.0% 2.0% 5.0%
-1.0% 0.0% 3.5% 1.0% 3.5%
Prime Central London
Source Savills Research Note These forecasts apply to average prices in the second-hand market. New build values may not move at the same rate.
-4.7%
-19.5%-18.5%
-4.1%
-18.6%
-3.1%
-19.5%
-2.8%
-21.3%
-2.2%
12.4%
7.1%
