Prime London sales transactions are up by nearly 36% month on month (October to September) according to estate agent W.A. Ellis
Most lettings activity is in the £1,000-£3,000 per week market with the Average tenancy now three years (compared to two years in 2007).
Tim des Forges, partner in residential sales at W.A. Ellis, comments: “The statistics and comparisons coming out of September and October’s sales activity are telling – September, although active, did not provide the volume of viewings we expected. Come the first week of October, however, the volume accelerated. The first week of half term was unprecedented, and is perhaps now bringing in buyers who avoided London during the summer’s events.
“This is illustrated by the total numbers of sales in prime central London in October, which are up by 35.81% on September. We suspect the reason for the transaction increase is due to a 30.57% rise in price reductions in the past month. The conclusion, with this high volume of sales, is the market correcting itself. That said, year on year prices have risen by 12% according to the latest Land Registry figures, so although there is evidence of price reductions, the market is not falling.
“When there is uncertainty, we must find a balance between the vendors’ and buyers’ expectations and a motivated vendor will recognise a price reduction as a way of effecting a sale. When we reduce a price, activity noticeably increases and transactions happen. Indeed, there has been a greater number of transactions in the £2m and above market – since 2007, on average, around 125 transactions at £2m and above take place each month. In July 2012 (the latest month that the Land Registry has stable numbers for) there were 148; 3% more than last July.
“Two flats illustrating this change are in one of the great, and often considered, bullet proof addresses – Cadogan Square. A first floor flat came to the market in April at £5.5m and a second floor flat, in June, at £4.95m. They were both valued on recent comparable evidence when the market was strong and competitive. Over the following months, the combination of a hardening market, the Olympics, and the implications and concern over Company owned property flooding the market, have cooled things down. Both flats were reduced a couple of times to end up at £4.5m and £4.35m respectively. Both went under offer after competitive bidding, within 48 hours of the final reduction. Both flats are in need of work, highlighting the trend that buyers want to purchase refurbished property, unless they see value, to avoid the hassle of doing work themselves.
“As we head in to November, we’re now at a pivotal point in the autumn market. We have six more weeks of marketing, and if buyers want to move in, or complete by Christmas, the next two or three weeks’ activity is crucial.”Source: PropertyTalkLive