PCL Neighbourhoods Still Performing Below Par

Coutts has pinpointed the best PCL neighbourhoods for HNW bargain hunters, where values remain up to 17% below peak, reports Abode2 luxury property magazine.

“Some of the most prestigious prime central locations are now representing best value relative to historic pricing”, said the 330-year-old private bank in its latest update to clients.

Knightsbridge & Belgravia are top of the list, with values 17% below the height of the market, while those in Mayfair & St James’s are 16.6% below.

Prices in Pimlico, Westminster & Victoria (-15.5%) are also a long way off their previous highs.

The capital’s golden postcodes are expected to perform well over 2023 – being some of the markets least reliant on mortgage debt – and these particular areas are likely to see heightened activity, due to their popularity with international buyers.

“Dollar-denominated buyers have the added impetus due to the strength of the dollar versus the pound,” added the report.

It’s a very different prognosis for other parts of London, where prices have been soaring of late.

“By contrast we expect activity to slow down in some outer prime markets which typically see more domestic and mortgage-reliant buyers,” said Coutts. “For context though, some outer prime markets have also experienced significant growth over the last five years – particularly since the pandemic. This means some of these outer prime markets now look expensive relative to historic prices.”

Outer London areas showing the highest recent price growth include:

• King’s Cross & Islington (up 23.5% in the last five years)
• St John’s Wood, Regent’s Park & Primrose Hill (up 24.7% since the beginning of the Covid pandemic)
• Hampstead & Highgate (up 22.8% since the beginning of the Covid pandemic)
• The data shows high-end property prices increased 0.5% in Q4 2022, bringing annual house price growth for the year to 3%; prices across prime London are now, on average, 5.4% below the market peak of 2014.
• “Interestingly, the last quarter did see a rise in the number of properties reduced in price from their initial listing, with 34.7% seeing a mark down,” noted Coutts’ Katherine O’Shea.
• “This suggests a potential windfall for buyers who saw the average value of a discount rise to 7.7%, up from 5.6% the previous quarter.”
• Turning to supply levels, the number of available prime properties valued at £1mn or more has remained broadly flat, with properties for sale and new listings down by 5% and 6% on the five-year average, respectively.