Unsurprisingly, activity in London’s high-end housing market dropped dramatically across April, May and June due to the coronavirus-caused lockdown. But the Coutts London Prime Property Index for Q2 2020 shows rays of hope for a turnaround.
Sales of residential properties worth £1 million or more halved compared to the same period last year. And the number of new properties put up for sale – 760 – is the lowest figure we have seen since we started researching this market over six years ago.
But Coutts Chief Investment Officer Alan Higgins, who wrote about the prospects for property post COVID-19 at the start of lockdown, says the outlook is promising. “Despite the deep recession as a result of the global health crisis, we retain our more positive view on London prime property which we adopted last year,” he says.
“The key positive factors include relatively attractive levels of sterling for global investors, which make London property look cheap in dollar or euro terms, and the ultra-low interest rate structure worldwide.”
A sign of the market standing up to the strange times we have seen this year is that the number of properties sold at a discount and the amount buyers are getting off haven’t risen. In fact, they have fallen. Sellers have already seen prices drop significantly since 2014 and are now digging their heels in.
Across the London luxury property market, prices have fallen -3% since the end of March and are down -12.6% compared to their peak in 2014. But they are still up +1.8% compared to the same time last year.
As Coutts Homebuying Journey Manager Alex Lyneel explains, there are wide-ranging differences between price movements in different parts of the capital.
He says, “Prices in prime central London have suffered more, whereas more traditional areas filled with family homes have held up quite well.
“For example, prices in Knightsbridge & Belgravia are now -23% cheaper than they were in 2014, but prices in King’s Cross & Islington have reached their highest ever levels – at £1,041 per square foot. Meanwhile, properties in Hampstead & Highgate Hill are only -6.6% below their peak, half the average price fall.”
“Prices in prime central London have suffered more, whereas more traditional areas filled with family homes have held up quite well.” Alex Lyneel, Coutts Homebuying Journey Manager.
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