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London Prime Housing Prices Poised for Year-Over-Year Growth

It would be the first time in three years

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A shot of Chiltern Street in Marylebone, London

Alexander Spatari
A shot of Chiltern Street in Marylebone, London
Alexander Spatari

Prime central London’s long-stagnant housing market is poised for annual price growth for the first time in more than three years, according to research from global real estate consultants JLL.

Prices grew at a modest 0.1% in the second quarter, according to the JLL report published Tuesday. It’s the second consecutive quarterly increase, making year-over-year price growth imminent, according to the firm. It would be the first time prime central London records year-over-year price growth since 2015.

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"The prime central London sales market is recovering some poise," wrote Neil Chegwidden of residential research at JLL London.

These days, the lower end of the prime spectrum is driving the market recovery with higher transactions and price increases. Smaller flats and homes priced under £5 million (US$6.57 million) have seen the most strength, in part because the cost of stamp duty, or transaction tax, on such homes is less onerous for buyers.

Meanwhile, prices continue to fall among properties priced over £5 million.

Overall, Mr. Chegwidden, added that "transaction levels continue to disappoint."

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Political uncertainty surrounding Brexit and the possibility that the coalition government may fall apart continue to impede dealmaking in the British capital—so has the disconnect between sellers and buyers on pricing.

"All said, however, the prime central London sales market is slowly turning in the right direction," according to the report.