According to the latest Knight Frank research, the prime outer London index has not moved more than 5% in either direction for almost three years.
Despite this, overall transaction numbers rose 1% in prime central London in 2017 compared to 2016.
The number of transactions in Prime central London between £1 million and £2 million fell 13% in the final quarter of 2017 while there was a 9% rise between £5 million and £10 million, LonRes data shows, reversing previous trends following the introduction of higher rates of stamp duty in December 2014.
Knight Frank says the turnaround suggests higher transaction costs have become "more fully assimilated in higher price brackets after an initially steeper decline in trading volumes".
The changed tax landscape has had a similar effect on price growth. While the £5 million to £10 million price band experienced the largest annual price declines between October 2015 and February 2017, it accounted for the strongest growth between June 2017 and January 2018.
The differentiation in performance between separate areas has also grown in the three years since the stamp duty hike in December 2014. The total number of transactions above £5 million in Chelsea rose to 26 in 2017 from 20 in the previous year, after the market initially experienced larger price drops than others following the higher stamp duty rates.
Elsewhere, pricing in Queen’s Park has started to decline. Average values rose on an annual basis during the first six months of 2017, but by the end of the year, prices were down 8.7% as stamp duty-related price adjustments rippled out from PCL.
Meanwhile, lower asking prices have underpinned sales volumes in the Fulham house market more than the flat market. There was a 24% year-on-year fall in transactions below £1.5 million (the price point below which most properties are flats) in the first nine months of 2017 compared to a more modest 9.3% decrease above that price point, Land Registry data shows.
