Prime Central London (PCL) property values slipped again in October, falling 0.3%, as the market continues to show the sharpest annual decline since the financial crisis.
Prices in the capital’s most expensive postcodes are now down 4.2% year-on-year, the largest drop since the second quarter of 2009.
Analysis by LCP Private Office reveals that the slowdown has been accompanied by a marked fall in activity. Annual sales volumes in PCL dropped 24.2% in the 12 months to August, averaging just 56 transactions a week.
Houses have been hit hardest, with sales down nearly a third over the year, compared with a 22.6% decline for flats.
WEAKENING CONFIDENCE
Across the wider market, October brought marginal declines of 0.2% in both Greater London and England and Wales, reflecting weakening sentiment ahead of the Autumn Budget.
Analysts note that PCL values have been sliding since 2022 and are now falling faster than the 4% annual downturn previously forecast for 2025 by major research houses.
The question of whether the market has reached its floor remains unresolved, with the sector bracing for the government’s upcoming announcements.
FURTHER DECLINE
Liam Monaghan (main picture), Managing Director of LCP Private Office, says the data highlights the scale of the correction across all markets, with PCL particularly exposed to weakening confidence.
And he adds: “We expect the Land Registry data to reflect a further decline in transactions during September and October, as many have chosen to sit tight and wait for clarity.
“We have, however, seen some cases of buyers and sellers accelerating their plans to get deals across the line before the Budget, in anticipation that the announcements could worsen their position.”
PRICE FALLS
Across PCL’s “village” markets, both flats and houses recorded annual price falls in the year to October.
The steepest declines for flats were in Pimlico, down 5.5%, followed by St James & Westminster at 5.2% and Kensington at 5.1%. South Kensington and Chelsea remain the furthest below their 2015 peaks, with values still 21.6% and 21.1% lower respectively.
House prices recorded even sharper drops, led by Belgravia at 6.4%, Pimlico at 6.1% and St James & Westminster at 6%.
For buyers seeking relative value against historic highs, Knightsbridge, South Kensington and Chelsea currently offer some of the largest discounts, at 13.7%, 13.6% and 13.4% below peak levels.
