RESIDENTIAL RESEARCH - A FRAGMENTED RECOVERY IN RENTAL VALUES STRENGTHEN - Knight Frank
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RESIDENTIAL RESEARCH
LONDON
RESIDENTIAL
REVIEW
SPRING 2018
A FRAGMENTED RECOVERY IN
RENTAL VALUES STRENGTHEN RISING RATES AND BREXIT
THE SALES MARKET
LONDON RESIDENTIAL REVIEW SPRING 2018 RESIDENTIAL RESEARCH
PRIME LONDON SALES MARKET INSIGHT
KEY FINDINGS Though market performance has become more fragmented,
some key trends are still discernible, says Tom Bill
5 By the standards of the last four decades, pricing effect on price growth, as Figure 1 shows.
Years since there has been a
double-digit price movement in movements in the prime London property market While the £5 million to £10 million price band
have become less extreme. experienced the largest annual price declines
either direction in PCL
between October 2015 and February 2017, it
Prime central London (PCL) has not experienced
accounted for the strongest growth between
a double-digit price movement up or down for
9%
June 2017 and January 2018.
more than five years, which is the longest run
since records began in 1976. Meanwhile, the The differentiation in performance between
Rise in the number of transactions
prime outer London index has not moved more separate areas has also grown in the three years
between £5 million and £10 million
than 5% in either direction for almost three years. since the stamp duty hike in December 2014.
in Q4 2017 versus Q4 2016
As sales volumes and pricing stabilise after a For example, the total number of transactions
succession of tax changes, market performance above £5 million in Chelsea rose to 26 in 2017
26 has become more nuanced and fragmented. from 20 in the previous year, an analysis of
LonRes and Knight Frank data shows. The
The number of £5 million-plus For example, the number of transactions in PCL market initially experienced larger price drops
transactions in Chelsea in 2017, up between £1 million and £2 million fell 13% in the than others following the higher stamp duty rates.
from 20 in 2016 final quarter of 2017 while there was a 9% rise
between £5 million and £10 million, LonRes data Elsewhere, pricing in Queen’s Park has started to
shows. decline. Average values rose on an annual basis
1% This marks a reversal of an earlier trend following
during the first six months of 2017, but by the end
of the year, prices were down 8.7% as stamp
Rise in transaction volumes in PCL the introduction of higher rates of stamp duty in duty-related price adjustments rippled out from
in 2017 versus 2016 December 2014. PCL.
The turnaround suggests higher transaction Meanwhile, lower asking prices have
costs have become more fully assimilated in underpinned sales volumes in the Fulham house
higher price brackets after an initially steeper market more than the flat market. There was
decline in trading volumes. a 24% year-on-year fall in transactions below
£1.5 million (the price point below which most
Meanwhile, overall transaction numbers rose 1%
properties are flats) in the first nine months
in prime central London in 2017 compared to
of 2017 compared to a more modest 9.3%
2016, LonRes data shows.
decrease above that price point, Land Registry
The changed tax landscape has had a similar data shows.
FIGURE 1
Reversal of Fortune How the £5m to £10m price bracket became the strongest performer
PCL highest annual growth by price bracket
Sub £1m £1m to £2m £2m to £5m £5m to £10m £10m plus
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
TOM BILL PCL lowest annual growth by price bracket
Sub £1m £1m to £2m £2m to £5m £5m to £10m £10m plus
Head of London 10%
Residential Research 8%
6%
4%
“By the standards of the 2%
0%
last four decades, pricing -2%
-4%
movements in the prime -6%
London property market have -8%
become less extreme.”
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Source: Knight Frank Research
2 Please refer to the important notice at the end of this report
PRIME LONDON PRICE AND RENTAL GROWTH, JANUARY 2018 JANUARY 2018 3 4
LONDON RESIDENTIAL REVIEW SPRING 2018 RESIDENTIAL RESEARCH
PRIME LONDON LETTINGS MARKET INSIGHT
KEY FINDINGS Supply levels have declined as more property owners sense the
sales market bottoming out, says Tom Bill
28
Consecutive months of quarterly rental
value declines in prime central London The key feature of the prime London lettings In the super-prime lettings market, there is
market over the last several years has been also anecdotal evidence that more tenants are
the high level of supply versus the historical putting a clause in their tenancy agreement to
-19%
average. give them the first right of refusal to buy at the
end of the tenancy in a so-called “try-before-
Decline in the number of properties Uncertainty in the sales market pushed supply
you-buy” agreement.
listed for rent in Q4 2017 versus up as more property owners decided to let
rather than sell. At the super-prime (£5,000- As a result of tighter stock levels, the number
Q4 2016
plus per week) end of the market, a record of Knight Frank prime London markets
number of tenancies were agreed in 2017 reporting positive annual rental value growth in
17%
and agents say a new breed of professional January 2018 was five compared to one in the
super-prime landlord has even been created, same month last year.
Rise in the number of new prospective catering to tenants with demands as exacting
They include Hampstead, where rents have
tenants that registered in Q4 2017 as those of buyers.
risen by 1% over the last year. As well as
versus Q4 2016 in PCL and POL
Rental values fell as a result of higher stock less rental stock, there is also anecdotal
levels. Indeed, rents fell on a quarterly basis in evidence that a growing number of landlords
-0.6%
prime central London in January 2018 for the in Hampstead are considering selling as price
28th consecutive month, setting a record for growth bottoms out. There are early signs of
Average annual decline in rental values the last two decades. this trend across a number of London markets.
in PCL between £750 and £1,000 per
However, as the chart below shows, the Other areas reporting positive rental value
week compared to -4.5% between
balance of power is starting to tip back in growth include King’s Cross, where supply is
£1,000 and £1,500 per week
favour of landlords as levels of new supply relatively constrained in a market with growing
moderate. demand from students and tenants working in
the tech sector.
Indeed, the number of properties listed for
rent in prime central London in the final three Indeed, the importance of students in driving
months of last year was 19% lower than the demand continues to grow. They represented
same period in 2016 and was the lowest 16% of all new prospective tenants in the
quarterly figure since Q1 2015, Rightmove year to January 2018, which was higher than
data shows. a figure of 14% recorded in the preceding
12-month period and 11% registered in the
year to January 2016.
FIGURE 1
Rental value declines moderate How declining stock levels can drive rental value growth Elsewhere, a series of new developments and
public realm improvements in Mayfair have
60%
New Lettings Properties on the Market (annual change, LonRes) PCL Rental Value Growth drawn tenants to the area, pushing up rental
50% 20%
values by 4.8% in the year to January. The
40% 15% relative weakness of the pound has also made
30% Mayfair more affordable to North American
10%
20% tenants, who are now more prevalent in the area.
10% 5%
By price band, annual rental value declines
0% 0%
were less marked below £1,000 per week in
-10% -5% PCL, a section of the market where demand
-20%
-10%
has been stronger. There was an annual decline
-30% of -0.6% between £750 and £1,000 per week,
-15% which compared to -4.5% between £1,000 and
-40%
-20% £1,500 per week. Rental value growth between
£1,000 and £5,000 has declined to a greater
Q2-2008
Q4-2008
Q2-2009
Q4-2009
Q2-2010
Q4-2010
Q2-2011
Q4-2011
Q2-2012
Q4-2012
Q2-2013
Q4-2013
Q2-2014
Q4-2014
Q2-2015
Q4-2015
Q2-2016
Q4-2016
Q2-2017
Q4-2017
extent because of weaker demand among the
traditional tenant base of senior executives due
Source: Knight Frank Research / LonRes
to economic and political uncertainty.
5LONDON RESIDENTIAL REVIEW SPRING 2018
MACROVIEW RISING RATES AND BREXIT
The mood of complacency on global stock a direction of travel towards compromise is RESIDENTIAL RESEARCH
markets came to an end in February. The becoming more discernible, embodied by Tom Bill
volatility on world markets showed investors the UK government’s apparent strategy of Head of London Residential Research
+44 20 7861 1492
are now factoring in rate rises in response ‘managed divergence’ from EU rules in some tom.bill@knightfrank.com
to inflationary pressures across global areas.
economies.
The pound was trading 13% higher against the HEAD OF LONDON RESIDENTIAL
In the UK, comparatively strong employment dollar at the start of February this year versus a Noel Flint
and wage growth data have bolstered the year earlier, which captures the same sense of +44 20 7861 5020
arguments of those who believe rates will cautious expectation. noel.flint@knightfrank.com
rise more than once this year, with some
The key question, however, is how these HEAD OF LETTINGS
economists pencilling in an initial rise in May.
official negotiations square with the views of Tim Hyatt
The result is that the lending environment for a group of Conservative lawmakers pursuing +44 20 7861 5044
residential property will become slightly less their own version of Brexit. tim.hyatt@knightfrank.com
benign, which, for some buyers, could add to
From their perspective, the reward would be
affordability pressures. PRESS OFFICE
to obtain a cleaner break from the EU. The risk
However, the same pressures may also bring for them is that they topple the government as Harry Turner
about a degree of liquidity in some sections well as the Prime Minister and a new Labour +44 20 3861 6974
harry.turner@knightfrank.com
of the market over time. In particular, property government pursues a softer version of Brexit.
owners whose mortgage repayments become
To fully understand the deliberations of
more onerous may decide to sell.
this group of Brexit supporters, it is worth
Meanwhile, there has been little sense of remembering that they differ on more than
complacency in the political arena in recent just their version of Brexit with the opposition
months. The key to anticipating the outcome Labour Party. They hold diametrically
of Brexit talks, as well as the likely impact opposing views on many issues.
on property markets, is understanding the
It is also fair to say that their precise vision for
compatibility of two unrelated processes. Knight Frank Residential Research provides
Brexit won’t entirely mirror the views of the strategic advice, consultancy services and
The first is the negotiations between 52% of the UK population who voted to leave forecasting to a wide range of clients worldwide
Brussels and London, which is focussed in June 2016. including developers, investors, funding
on the pragmatic matter of the post-Brexit organisations, corporate institutions and the
It is likely that they will therefore consider public sector. All our clients recognise the need
relationship between the UK and the EU.
carefully whether they have more to lose or for expert independent advice customised to
While the realpolitik is not always obvious, gain by moving against the Prime Minister. their specific needs.
RESIDENTIAL RESEARCH RESIDENTIAL RESEARCH
RESIDENTIAL RESEARCH
PRIME CENTRAL PRIME CENTRAL
LONDON SALES INDEX LONDON RENTAL INDEX
The prime central London sales index is based on
AREAS OF PRIME CENTRAL LONDON This report analyses the performance of single-unit
rental properties in the second-hand prime central TOTAL RETURNS IN PRIME
LONDON
CENTRAL LONDON SET TO RISE
repeat valuations of second-hand stock and does
RETURN TO POSITIVE GROWTH
London market between £250 and £5,000-plus per
not include new-build property, although units from week. For an analysis of the build-to-rent market
completed developments are included over time. and the institutional private rented sector in London
and the rest of the UK, please see our Private
Average prices were 0.7% down in the year to December after bottoming Rented Sector Update report A combination of rising rents and capital values means total returns will
RESIDENTIAL
out at the start of 2017, says Tom Bill http://www.knightfrank.co.uk/research improve, says Tom Bill
December 2017
Average rents in prime central London fell 2.2% 14% over the same period while there were LONDON SUPER-PRIME LETTINGS INSIGHT SPRING 2018
December 2017 The prime central London sales market response in asking price adjustments and a more year-on-year in December, which was the most 17% more new prospective tenants registering.
REVIEW
continued its move towards recovery mode in rapid recovery this year. An average gross yield of 3.2% in prime modest decline recorded in 21 months. Average
From an investor perspective, in a world of low
Sales volumes increased 5% in the six December. central London compared to a 10-year UK rental values for existing homes have been falling
While pricing of £1m - £2m homes seemed more year-on-year for more than two years due to
returns, the prime central London lettings market Price sensitivity in the sales market meant there was a record number of super-
months to November government bond yield of 1.2% became a comparatively more attractive asset prime tenancies in 2017. However, an anticipated recovery in sale prices means
While average prices fell 0.7% on an annual resilient in late 2016, there is evidence that prices rising supply but the pattern is now reversing.
basis, this was the most modest rate of decline class in 2017. there are more ‘try-before-you-buy’ tenants, as Tom Smith tells Tom Bill
have instead been adjusting this year.
AUTUMN 2017 Average prices fell 0.7% in the year to recorded since June 2016. The broadly flat result A large spike in new lettings properties in
Average rents in prime central London fell Although extra taxes have given landlords
December provides further evidence that the price declines Asking price data underlines this trend, showing the middle of last year, which followed the There was a record number of super-prime compared to 11 in 2016. “There is increasingly
2.2% year-on-year in December pause for thought in recent years, this has come
of up to 7% recorded in the middle of last year introduction of the additional rate of stamp duty tenancies agreed in London in 2017 as price- the opportunity to rent the sort of high-quality
that reductions in asking prices have been more against the backdrop of rental values that are
are bottoming out. in April 2016, was one of the factors behind sensitivity in the sales market continued to boost stock that has come from the sales market that
Between £5 million and £10 million prevalent below £2 million in 2017. Some 40% bottoming out.
The number of new lettings properties the increase. The other key reason has been demand. historically did not exist on the lettings market,”
average prices rose 1.9% in the year to Indeed, an analysis of pricing on a more local of sub-£2 million properties in prime central coming onto the market recorded a like- a growing number of so-called ‘accidental The current average gross yield in prime central said Tom. “The clear message for landlords is Prince Albert Road, let, guide price £12,000 p/w
December basis across prime central London shows that London underwent an asking price reduction in for-like fall of 1.2% between January and landlords’, a group of would-be vendors who London is 3.2%. Some 137 properties were rented out at £5,000-
that super-prime tenants will not compromise on
the number of areas that recorded a rise in November versus 2016 are waiting for more pricing certainty before plus per week last year, which represented a
the year to November 2017, according to data This is higher than the risk-free rate of a 10-year quality in the same way as buyers will not.”
prices during the month continued to grow in they return to the sales market. 34% increase on the figure of 102 in 2016. In the
Important Notice
40% of sub-£2 million properties from Rightmove. This compares to some 29% UK government bond, which was yielding three-month period between July and September
December, as figure 2 shows. The number was The prime central London sales market is now
underwent a price reduction in the of £5 million-plus properties undergoing a price There was a 19% rise in viewings between As figure 2 shows, the rate of new lettings approximately 1.2% in mid-December. Indeed there were 49 transactions, which is a record for a
at its highest monthly level since May 2016. moving towards recovery mode as higher
year to November, versus 29% reduction over the same period. January and November 2017 versus 2016 properties coming onto the market has slowed. the spread between the two is high by historic single quarter in 12 years of LonRes data. transaction costs are absorbed. Average prices
above £5 million However, there is still no consistent pattern Indeed, November was the first month in 2017 standards, as figure 1 shows. above £10 million rose 0.2% in the year to
Activity also continued to rise modestly in “The momentum of recent years is still gathering
across different price bands. that recorded a year-to-date decline in the January 2018, the first annual increase in almost
The number of tenancies agreed rose 14% This trend looks set to continue which, pace,” said Tom Smith, Knight Frank’s head of
December. There was a 5% like-for-like increase number of new lettings properties placed on the
Macroview: The political backdrop For example, average prices rose 1.9% in the in the first eleven months of 2017 combined with bottoming out sales values, will super-prime lettings. “Demand is resilient due to two years.
© Knight Frank LLP 2018 – This report is
in sales volumes in the six months to November market, with a fall of 1.2%. Kensington Park Gardens, let, guide price £15,950 p/w
year to December for homes valued at between boost total returns. Despite the fact that UK higher rates of stamp duty and the associated In a sign that more tenants are anticipating this
£5 million and £10 million, compared to a fall of 2017, LonRes data shows. While we don’t Demand remained stronger than last year, inflation rose to 3.1% in December, there is uncertainty over the short-term prospects for
Macroview: The political backdrop recovery, there has been an increase in the
1.2% for properties priced at between £1 million expect sales volumes to improve in a meaningful which will also underpin rental value growth. no immediate likelihood of a rate rise. Indeed, price growth in the sales market. A lack of clarity number who have requested a clause in the
and £2 million. way until the market adjusts fully to higher There was a 19% rise in viewings between subject to the usual caveats, the Bank of regarding Brexit has also been a factor.” tenancy agreement giving them first refusal to Super-Prime Lettings Team
transaction costs, we explore how the current January and November 2017 compared to England expects the base rate to be 1% in 2020, As well as more transactions, the deals agreed buy at the end of the tenancy. The Knight Frank Super-Prime Lettings team
Higher rates of stamp duty had a more
2016. The number of tenancies agreed rose which is still ultra-low by historical standards.
published for general information only and
immediate and marked impact at the higher level political backdrop may influence behaviour in the are now on a longer-term basis as renting “This option was rarely mentioned a few years
provides a bespoke service to clients with property
of the market last year - which led to a quicker Macroview section on page 2. becomes more accepted as a tenure model in interests of £5,000-plus per week in prime central
FIGURE 2
ago but is now a frequent topic of conversation
FIGURE 1 the super-prime market, said Tom. The average London. Led by Tom Smith, the team consists of
PCL returns look more attractive New demand outpaces new supply on viewings. Many landlords have nothing to
length of a tenancy in 2017 was 589 days, which 12 local specialists with over 130 years of collective
Spread between average gross PCL yield Calendar year-to-date 2017 versus 2016 lose with this ‘try-before-you-buy’ route,” says
FIGURE 1 FIGURE 2 compared to 548 in 2016 and 528 in 2015, an experience and has a dominant market share in
and 10-year UK government bond yield Tom. “The worst case scenario is that you have
Higher value property prices outperform More markets return to positive growth New properties on the market analysis of Knight Frank data shows. London. It completed twice as many super-prime
an income stream that covers your costs and
not to be relied upon in any way. Although
Annual growth by price band in the second half of 2017 Markets reporting price growth vs price declines PCL yield UK 10yr govt bond yield New prospective tenants lettings deals in London as its nearest competitor
Tenancies agreed There was also a record number of £15,000- the best is that you also have a sale at the other
PCL vs UK 10yr bond spread (right axis) in 2017, LonRes data shows. The team members
Sub £1m £1m to £2m £2m to £5m Applicant viewings plus per week deals last year, with 20 recorded end.”
TOM BILL £5m to £10m £10m-plus TOM BILL 8% 2.5%
30%
are based in Belgravia, Belsize Park, Chelsea,
Hampstead, Hyde Park, Kensington, Knightsbridge,
Head of London 2% 100% Head of London 2.0% FIGURE 1
7% Marylebone, Mayfair, Notting Hill, South Kensington
Residential Research Areas Residential Research 25%
1%
80%
reporting
1.5%
London super-prime lettings volumes and rental values
60% positive 6% and St John’s Wood. Knight Frank’s global real
0% growth 20%
high standards have been used in the
estate network gives the team access to London’s
40%
“In a world of low returns, 1.0% Total Transactions Average weekly rent Maximum weekly rent
“The broadly flat result provides -1%
20%
5%
most exclusive properties on and off the market.
the prime central London 0.5% 15% 50
further evidence that the -2% £45,000 £45,000
0% 4%
lettings market became a 0.0% 10% 40 £30,000
£35,000
£29,000 £25,000 £30,000
falls of up to 7% recorded
-3% -20%
comparatively more attractive £16,800 £15,000£18,500
SDLT reform 3% £20,000
-4% -40% £13,500
in the middle of last year are
-0.5% 5% 30
bottoming out.”
-5% -60% Areas
reporting asset class in 2017.” 2%
-1.0%
20 £10,000
Tom Smith
-80% negative 0% Head of Super-Prime
preparation of the information, analysis, views
-6%
-100%
growth
Follow Tom at @TomBill_KF 1% -1.5%
Follow Tom at @TomBill_KF -7% 10 £8,000 Lettings
-5%
2010
2011
2012
2013
2014
2015
2016
2017
0% -2.0% tom.smith@knightfrank.com
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
For the latest news, views and analysis 0 £6,000
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
For the latest news, views and analysis +44 20 7881 7730
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on the world of prime property, visit
on the world of prime property, visit
Global Briefing or @kfglobalbrief Source: Knight Frank Research Source: Knight Frank Research / LonRes
Global Briefing or @kfglobalbrief Source: Knight Frank Research Source: Knight Frank Research
THE DEMAND RECOVERY THE THREE-TIER LETTINGS MARKET BREXIT AND FINANCIAL SERVICES
and projections presented in this report, no
Source: Knight Frank Research / LonRes
London Review Autumn 2017 Prime Central London Prime Central London Super-Prime Lettings
Sales Index December 2017 Rentals Index December 2017 Spring 2018 responsibility or liability whatsoever can be
accepted by Knight Frank LLP for any loss or
RESIDENTIAL RESEARCH
damage resultant from any use of, reliance on
or reference to the contents of this document.
LONDON As a general report, this material does not
DEVELOPMENT
HOTSPOTS KENSINGTON SALES MARKET INSIGHT 2018 HYDE PARK AND BAYSWATER SALES MARKET INSIGHT 2018 QUEEN’S PARK MARKET INSIGHT 2018 necessarily represent the view of Knight Frank
LLP in relation to particular properties or
RESIDENTIAL DEVELOPMENT FIGURE 1 FIGURE 1 FIGURE 1
OPPORTUNITY AREAS 2018 Property prices in Kensington
Achieved price, year to December 2017
Property prices in Hyde Park and Bayswater
Achieved price, year to December 2017
Property prices in Queen’s Park
Achieved price, year to December 2017
l Up to £1m
projects. Reproduction of this report in whole
FIGURE 2 FIGURE 2 FIGURE 2
l £1m to £2.5m Kensington fact sheet Hyde Park and Bayswater fact sheet Queen’s Park fact sheet
l £2.5m to £5m
l £5m to £10m Population: 32,098 Population: 27,741 Population: 153,991
Neasden
l £10m+
Dollis Hill
AVERAGE £PSF AVERAGE £PSF AVERAGE £PSF
Willesden Green
or in part is not allowed without prior written
Year to December 2017 £840
Kens
Year to December 2017 £1,585 Year to December 2017 £1,250 West Hampstead
Year to December 2016 £1,655 Ed Year to December 2016 £1,270 Kilburn Year to December 2016 £835
Paddington Basin
ingto
Kensington Year to December 2015 £1,710
gw
Year to December 2015 £1,270 Year to December 2015 £815
are
Palace
Ro Brondesbury
n Pala
Porchester
Cam
MAXIMUM £PSF ad MAXIMUM £PSF MAXIMUM £PSF
Hyde Park Square
Holl
Paddington Year to December 2017 £1,315
Year to December 2017 £5,200 Year to December 2017 £3,080
pde
Holland Park
ce Gard
and
Year to December 2016 £6,545 Year to December 2016 £2,940 Brondesbury Park Year to December 2016 £1,280
n Hill
Year to December 2015 £1,400
Villa
Queensw
Year to December 2015 £5,790 Year to December 2015 £2,560 Kilburn
Sal
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Gloucester
Leinste
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Connaught
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Source: Knight Frank Research / LonRes
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Willesden Junction Amy Johnson Aviator
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Ke as William Thackeray, novelist Lancaster Gate Viscount Northcliffe Newspaper Proprietor
Vill Sir James Barrie, novelist
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Abi Jean Sibelius, composer
and content within which it appears. Knight
Lady Violet Bonham-Carter, politician
T.S. Elliot, poet STOCK BY PROPERTY TYPE
Hertha Ayrton, physicist
Sir Winston Churchill, politician l Up to £750,000
Agatha Christie, writer l £750,000 to £1,000,000
Flat 71%
l £1,000,000 to £2,500,000 l Up to £500,000
l £2,500,000 to £5,000,000 l £500,000 to £750,000
STOCK BY PROPERTY TYPE STOCK BY PROPERTY TYPE
l £5,000,000-plus Source: Knight Frank Research / LonRes / Land Registry Terraced 21%
l £750,000 to £1,000,000
Frank LLP is a limited liability partnership
Source: Knight Frank Research / LonRes / Land Registry Flat 76% l £1,000,000 to £2,000,000
Flat 90%
Prime central London update John White, Hyde Park Office Head l £2,000,000-plus Source: Knight Frank Research / LonRes / Land Registry
Semi-detached 6%
Terraced 21% Asking price reductions continue to stimulate “Market activity has picked up as the political
Prime central London update Sami Robertson, Kensington Office Head Semi-detached 2% demand in prime central London, producing and economic backdrop has become Terraced 10% 2%
Activity in the prime central London sales “More vendors have adjusted their asking 5% growth in sales volumes in the second comparatively calmer following the snap Prime Outer London Update Laura Dam Villena, Queen’s Park Office Head Detached
market continues to stabilize, a trend price to the point that their properties are Detached 1%
half of 2017 versus 2016, LonRes data general election last June. While issues like Prices in prime outer London fell 2.2% “Prices in Queen’s Park and Kensal Rise rose on
in the year to January as the market an annual basis until the middle of 2017. By the end
registered in England with registered number
that is more marked in higher-value gaining growing interest from buyers who AGE OF HOUSING STOCK shows. This trend has been more marked Brexit remain, a more significant impact on AGE OF HOUSING STOCK AGE OF HOUSING STOCK
price brackets. While the overall number are heavily scrutinising the market for value. in higher price brackets and there were 10 the market has been the fact that vendors are continued to adjust to higher rates of the year, they had declined 8.7% as stamp duty
of transactions rose 5% in the last six Kensington has also benefited from some Pre-1900 68% deals above £5 million in the W2 area in the taking a more pragmatic approach to setting Pre-1900 44% of stamp duty. However, leading related price adjustments
Contains OS data ©rippled outwards
Crown Copyright from
and database right 2017 Pre-1900 52%
months of 2017 compared to 2016, the high-quality new-build schemes, which have second half of 2017 compared to 6 in 2016. asking prices. As long as there is supporting indicators of demand suggest that prime central London. However, with a 52% increase
9% 12% 1900-1939 19%
increase was 14% for properties valued helped reposition the area as more current
1900-1939
It is also noteworthy that the maximum evidence, buyers are prepared to put in offers
1900-1939 recent declines may start to bottom in buyers registering and an 81% increase in viewings
at between £5 million and £10 million, in the minds of buyers. However, education £PSF in the area rose in 2017 (figure 2). It close to the asking price. However, it is still out. Knight Frank data shows there last year compared to 2016, there is still strong 1945-1972 9%
1945-1972 7% 1945-1972 24%
was a 6% rise in the number of new demand for appropriately-priced high-quality homes.
OC305934. Our registered office is 55 Baker
Contains OS data © Crown Copyright and database right 2017
LonRes data shows. In Kensington, this still plays a key role. One house near a very underlines how prepared buyers remain to too soon to say the
Contains OSmarket has reached
data © Crown Copyright a
and database right 2017
trend is highlighted by the more resilient good school exchanged on the day of the 1973-1999 9% purchase best-in-class stock, particularly turning point. Sales volumes will only increase 1973-1999 9% prospective buyers in 2017 compared Recent competitive bidding suggests that the decline 1973-1999 11%
sales volumes in the typically higher-value general election in 2017. The buyer did not in the area of north of Hyde Park, which more notably once transaction costs have to 2016. Meanwhile, viewings rose may be set to reverse and we are still seeing a steady
2000-present 9%
2000-present 7% 2000-present 11% 17% and the number of exchanges flow of buyers from prime central London areas
postcodes to the north of Kensington High want to wait for the result, the school was remains comparatively good value versus been absorbed in a more widespread way Source: Knight Frank Research / Valuation Office Agency
Street, as figure 4 shows. more important.”
Source: Knight Frank Research / Valuation Office Agency
other sides of the park. across the market.”
Source: Knight Frank Research / Valuation Office Agency rose 11% year-on-year. including Notting Hill and St John’s Wood.”
AREAS TO WATCH PRICE FORECASTS MARKET UPDATE
London Hotspots Kensington Hyde Park Queen’s Park Street, London, W1U 8AN, where you may
market insight 2018 market insight 2018 market insight 2018 look at a list of members’ names.
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