While the prime central London residential market approaches price stabilization, Notting Hill has become the hottest neighborhood in the British capital with a 2.1% annual price appreciation in the last 12 months, according to a Knight Frank report Thursday.
By the end of June, the average price in prime central London fell 1.8% year-over-year, suggesting that the market continues to bottom out, said Tom Bill, head of London residential research at Knight Frank.
"We don’t anticipate any meaningful price change—upwards or downwards—imminently," mainly due to the dangling political uncertainty and the negative impacts of the last two stamp duty increases, Mr. Bill said.
More:West Seems Best in London as Properties Sell Faster, For More
From the last peak in August 2015, prime central London prices have fallen 9%, but the rate of decline has been gradually slower.
On a yearly basis, one-third of prime central London areas posted positive price growth, whereas two-thirds reported a decline.
Against this backdrop, Notting Hill became the fastest-growing area with an annual 2.1% price appreciation, benefitting from so-called need-based buyers, according to Mr. Bill.
"Notting Hill’s market has traditionally been driven by buyers looking for schools, looking to downsize or upgrade, not international pied-à-terre buyers," he said.
Overall, the number of sales in prime central London remained constrained in June, dropping 0.9% from the first quarter of this year, according to the report.
FROM PENTA:Rare Edition of ‘Wuthering Heights’ to Sell for £8,500 in London
As the prime central London sales market stabilized, more landlords put their properties on the market to sell instead of letting, causing rental supply to fall and average rents to go up, according to a separate report also released by Knight Frank on Thursday.
By June this year, the average rent in prime central London posted a 0.8% year-over-year increase, the first positive growth following a 28-month run of declines.
The super-prime rental market continued to grow at the fastest rate, with the number of leases priced above £5,000 (US$6,609) per week increasing 29% year-over-year, Knight Frank said.