Looking back over 2011, constrained stock levels characterised the prime London sales market, leaving many potential buyers frustrated by the lack of suitable properties available in their areas of choice.
In our January survey only 19.5% of agents surveyed had seen an increase in new instructions in the last three months of 2011, compared with 49% reporting a fall. However, the latest survey results suggest more properties are reaching the market, with 35% of respondents reporting a rise in new instructions so far this year.
Central London still appreciating but will the Budget hamper growth?
Strong demand for homes in prime London continued into the first quarter of the year, with prices increasing by 1.8%.
The market over £2 million remained buoyant in the first three months of the year, with prices rising by 2.1%. It remains to be seen whether the new stamp duty threshold introduced in the 2012 budget will temper demand and price growth at the top end over the course of the year.
Within Prime Central London there are different sub-markets. The market under £2 million has a higher proportion of domestic buyers, with houses commanding higher prices per square foot than flats. So far this year, houses have maintained an average premium of 24.6% over flats (an additional £231 per square foot). The market above £2 million is quite different with average prices paid per square foot considerably higher.
At the top end of the market, where non-domestic buyers dominate, flats remain the most sought-after.
Overseas buyers are continuing to shun the traditional London townhouse in favour of lateral living spaces, parking and security. At over £2 million, it is flats which command a £ per square foot premium, averaging 20% over houses.
