Source: Prime Resi

There’s no sign of a reversal in fortunes for London’s tumbling super-prime sales market, according to some sterling new research by Carter Jonas. Here’s the findings in a nutshell…

Sales

• Despite a significant cooling in some PCL markets throughout 2013 and the early part of 2014, Q2 2014 witnessed a return to strong capital value appreciation for most PCL areas.
• Relatively strong demand from domestic buyers boosted by a spring market led to this surprise upturn.
• Knightsbridge reinforced this trend, where a flat previous 18 months have been left behind with a 5.7% capital value growth witnessed in H1 2014.
• The one exception to the growth witnessed in H1 2014 is the Super Prime market where quarterly capital values have been falling since spring 2013 with no sign of a trend reversal.
• Our data showed average falls of 11% in this market from June 2013 to June 2014.
• Wandsworth and Fulham have now matched and exceeded the more established PCL markets of Holland Park and prime W2.
• Due to a prolonged period of stagnation, capital value growth levels in Knightsbridge have been matched by the Mayfair and Marylebone markets, with all three markets recording a ten year capital value growth of between 160-180%.
• Due to falling buyer enquiries across most markets, we expect capital value growth rates in PCL to slow significantly during H2 2014.
• We also expect Outer Prime growth rates to cool during this period, albeit not to the same degree as core PCL.

Lettings

• Stock levels of rental product remained high within most Prime and Outer Prime London markets, with demand
  relatively static due to flat levels of recruitment in the City.
• Poorer quality stock has tended to suffer, experiencing longer voids and sharper price reductions.
• Rental values in the 12 months to June 2014 remained relatively flat with overall PCL rents dropping just over 1%.
• In the outer core market, a fractional fall of -0.1% was recorded in Wandsworth and an increase of 2.9% was recorded in Fulham.
• Although volatile, the Knightsbridge and Mayfair markets have produced the strongest rental growth since 2006.
• Marylebone has proved the most stable market with its consistency and continuing out-performance of PCL rents as a whole, outstripping that of PCL as a whole for seven out of the last eight years.