Buyers and sellers in London have adopted a “wait-and-see” mode while Brexit negotiations play out, according to Coutts.
The private bank’s London Prime Property Index reveals a stagnant market. Across the capital’s prime hotspots, sales transactions are reported to be down -5.5 per cent versus Q2 2018, and -15.8 per cent from the same time last year.
Over the long term, the scale of the fall is starker still with sales volumes falling by a third since 2013. Discount rates remain high but have fallen for the third consecutive quarter which, Coutts says, suggests that the tide might be turning.
Coutts head of asset management Mohammad Syed says: “The end of Brexit uncertainty – when it arrives – is likely to release some pent-up demand and see a rise in market activity and prices. But we believe that it will be some time before transaction volumes return to the levels seen in 2013.”
Coutts also warns that, in a market where house prices are falling, property valuations coming in lower-than-expected are not uncommon.
Coutts head of lending propositions George Toumbev says: “We recognise the importance of having strong relationships with valuation surveyors, which means that we can often get an indication of market value before an offer is made.”
Coutts found that Kensington, Notting Hill and Holland Park saw the most super prime sales in Q3, even with a 0.4 per cent price rise versus last year. King’s Cross and Islington continue to produce the highest yields compared to other prime markets covered in Coutts’ index, increasing from 4.5 per cent to 4.7 per cent since the last quarter.
Mayfair and St James’s have the fastest sale times and the highest average price per square foot in the bank’s report, while Bayswater and Maida Vale come bottom of speed of sale, averaging more than six months.