Prime London Sales Report: June 2020
Prime central London sales index: 5290.0
Prime outer London sales index: 253.6
2 minutes to read
June provided further evidence that price declines are bottoming out in prime London property markets, as quarterly declines narrowed across the capital.
In prime central London, prices fell 3.6% in the three months to June, which was down from a figure of -4.4% registered in May. The monthly fall was 0.2%, taking the average annual decline to 5% in June.
In prime outer London, a 3.7% quarterly decline compared to a quarterly fall of 5% in May. Prices rose 0.3% from May, which was the first monthly rise since February. On an annual basis, average prices fell 5.3%.
The number of transactions across all UK property markets bottomed out in April this year due to the impact of the global pandemic. Government figures show transactions in May were 50% below the same month last year, however a figure of 48.450 was a 16% increase on April.
“The decline in sales volumes has bottomed out and it appears the same thing is happening with prices,” said Tom Bill, head of UK residential research at Knight Frank. “The strength of the recovery will become clearer as the economic consequences of the pandemic materialise but the property market has shaken off the initial effect of the lockdown.”
The average discount to the asking price during the property market lockdown between the end of March and mid-May was 7.6% in prime central London (PCL) and 4.2% in prime outer London (POL).
Since the end of lockdown, the figure is 6.3% in PCL and 2.1% in POL.
The smaller discount to the asking price in POL reflects the same growing demand for more outdoor space that has been seen in the market outside of the capital, where the average discount to the asking price has been 2.5% since the market re-opened on 13 May.
Higher and lower value markets have performed most strongly in London since the lockdown was lifted.
The number of offers agreed below £1 million since 13 May was 41% higher than the five-year average for the equivalent period. It was the biggest rise by price band, reflecting a desire for more space among people living in relatively smaller properties while remaining in the sub-£1 million price bracket.
The second highest increase was for properties valued at £5 million-plus, where the equivalent increase is 10%. Fewer financial constraints for buyers in higher-price brackets mean they are typically able to transact more quickly. The safe haven appeal of prime London property and the weakness of the pound have also been important factors in higher price bands.