LCPAca Residential Index: September Report
The LCPAca Residential Index is a monthly report providing an overview of prices and transactions for new build and existing stock. Recording every transaction for full market value registered through Land Registry, the index aims to be the most comprehensive available, overcoming issues present in existing residential indices based on asking prices, mortgage approvals, or selective samples.
Prime Central London
Prime Central London: Spring Surge Peters Out
Naomi Heaton, CEO of LCP, comments on the September LCPAca Residential Index
The price rally in prime central London seen in the Spring, around a hotly anticipated Brexit resolution, seems to have petered out. Average prices for existing stock declined 0.6% in September to £1,788,370. This is on top of a lacklustre annual performance showing a 1.8% fall in prices.
Annual transactions have also fallen by a further 8.3% to just 3,274, the lowest level ever recorded. However, there has been a more recent uptick with a monthly increase of 3.5%.
Whilst an increase in sales normally presages price rises, the continued uncertainty around the UK’s exit from the EU and the prospect of another General Election, may delay any potential upturn.
New build average prices have increased by 21.3% over the year to £3,140,485, reflecting the sales of some high-end developments. This represents a premium of 75.6% over existing stock. However, annual transactions have fallen by over 61% and new build currently represents only 8.5% of the total market.
Greater London
Greater London: Prices Creep Up On Old Stock But New Build Struggles
Naomi Heaton, CEO of LCP, comments on the September LCPAca Residential Index
The average monthly price in Greater London for existing stock increased by 1% in September, reaching £618,772. This has contributed to a modest 2.3% uplift over the year, following a period of zero growth.
Annual transactions to September amounted to 83,959, a fall of 4.3% on the previous year. This reflects a continuing downward trend since a spike of 122,521 prior to the April 2016’s Higher Rate Additional Duty (HRAD) on second homes and buy to let properties. Nevertheless, for the third month running there has been an uptick in transactions with September seeing 0.9% growth.
This more positive news for transactions and prices may be short-lived as parliament continues to kick the Brexit can down the road.
There is little doubt that the Brexit fiasco has taken its toll on the new build market, as well successive tax increases and over supply. In September, transactions fell by 4.3%, contributing to an annual fall of almost 25%. Premium pricing, currently 15.3% over existing stock, is also inhibiting market liquidity.
England & Wales (Excluding Greater London)
England & Wales: Market Holding Tight
Naomi Heaton, CEO of LCP, comments on the September LCPAca Residential Index
Average prices in England and Wales (excluding Greater London) for existing stock increased by just 0.6% in September to £259,242. This has contributed to a lacklustre annual increase of 1.7%, adding to the picture of a generally stagnating market.
Transactions have plateaued too, with an annual increase of just 0.2%. Nevertheless, September does consolidate a more recent upward trend, as seen in Greater London, with a modest increase of 1.2%. Generally, transactions in England and Wales have withstood the political maelstrom of the last three years, with only modest falls, faring far better than the Capital.
The new build market is also holding up considerably better than in Greater London, with an increase of 5.4% in annual prices and 4% in transactions. Again it is questionable how sustainable this will be, with a price premium over existing stock now close to 18% and more recent monthly falls in transactions.