Prime central London has seen its worst performance since land registry data was first recorded in 1996 and worse than during the credit crunch, the quarterly Land Registry results have shown.
Figures for the quarter revealed that average prices fell 8 per cent since the last quarter of 2014, from £1,738,783 to £1,599,193 in the first quarter of 2015.
Transactions during the period saw a 22.7 per cent fall compared to last year, standing at 1,143 – the lowest in seven quarters.
The fall in transactions was greater than that witnessed during the credit crunch, when prices fell 12.2 per cent over a three-month period.
“These pronounced drops in PCL demonstrate the undisputable storm clouds which have been hovering over the market as the prospect of a Labour-SNP coalition, a mansion tax and stringent rent controls drew ever nearer,” Naomi Heaton, chief executive of London Central Portfolio, said. However, not all market commentators agreed that Land Registry figures pointed to an ongoing downturn in prime property.
Jeremy Duncombe, director at Legal & General Mortgage Club and Housing, said: “These figures are not surprising, and reflect both a correction in pricing, as well as external market factors.
“London is likely to recover some of the lost ground as certainty returns, but the main issue would still be supply versus demand. We need the new government to follow through on their pre-election promises to build more houses. Without decisive action, prices will still grow disproportionately in London”
Russell Quirk, creator of the Property Hotspots index, said: “The uncertainty caused by the general election was a large contributing factor, with many waiting to see the outcome before committing to a property above £2m.
“It is most likely this is going to translate into a more buoyant picture in the months to come.”
In its 23-page April Residential Markets Survey, the Royal Institute of Chartered Surveyors said: “Anecdotal evidence suggests that the general election may have been weighing on demand in certain parts of the country and may have deterred some sellers from listing their properties for sale.”
James Carter, principal of London-based Independent James, said: “Prime central London is almost like its own market, and with the pound strengthening against the euro it perhaps deterred overseas buyers.
“Investors may also have been put off because of high prices and rental income not stacking up, which, with all the discussion about non-dom status, sends a message to investors. I am not overly surprised by the figures.”
REGION Monthly yearly average change* change** price***
South East 0.8% 10.1% £243,512
London 0.2% 11.3% £462,799
East Midlands -0.2% 4.2% £133,063
Yorks & Humber -0.2% 3.3% £120,914
West Midlands -0.2% 2.8% £136,761
South West -0.7% 3.8% £185,162
England and Wales -0.8% 5.3% £178,007
North West -0.9% 2.2% £111,149
East -1.2% 8.4% £199,133
Wales -2.9% 2.7% £117,828
North East -4.0% -2.9% £97,444
Source: Land Registry Notes: *Since Feb. 2015, **March 2014, ***March 2015