Prime Central London property values slipped again in August, falling by 0.1%, with prices now 2.9% lower than a year ago – the steepest annual decline since the latter half of 2019.
Across Greater London, prices were flat on the month, while values across England and Wales edged up 0.1% and are 1.3% higher than a year earlier, according to analysis by LCP Private Office.
Despite the stabilisation of mortgage rates, with sub-4% deals more widely available, transaction levels remain depressed.
In Prime Central London, sales volumes are down 19.2% on the year, averaging just 58 a week. That is about three-quarters lower than at the height of the market in 2000.
SUBDUED TRANSACTIONS
Liam Monaghan, Managing Director of LCP Private Office, says: “Despite the improved outlook for affordability with more settled interest rates and the regular availability of sub-4% mortgages, transaction volumes across all markets remain subdued.”
Analysts at Savills and Knight Frank have both cut their forecasts, with prices in Prime Central London now expected to fall by about 4% in 2025.
BUDGET UNCERTAINTY
The slowdown comes amid a build-up of supply, weak buyer urgency and uncertainty over the government’s Autumn Budget.
Proposals ranging from stamp duty and council tax reform to new levies on capital gains and lifetime gifts have created further hesitation among buyers and sellers.
However, some investors are beginning to take advantage of falling values and robust rental yields.
Flats in parts of central London are now achieving gross yields of up to 6%.
South Kensington has seen some of the sharpest falls in the past year, with flat prices down 4.2% and still more than 20% below their 2015 peak.
Notting Hill and Holland Park recorded a 4.4% decline in house prices, while Chelsea and Kensington flats were also down more than 4%.
