JLL Residential

Transaction levels grow as prices bottom out in prime central London

London, 14 September 2017

Our latest residential research for prime central London notes that annual total sales between Q2 2016 and Q2 2017 increased by 7% versus the twelve months between Q1 2016 and Q1 2017. Despite the challenges posed by low price growth for properties valued above £5m, we sold a house on Brompton Square for over £10m, along with three flats on Pont Street, two of which achieved over £2,000 per square foot.

The sub £2m sales market in the south western neighbourhoods of prime central London (PCL) has benefited from stable prices and greater optimism among buyers and sellers across the area as a whole. However, seasonal trends mean that August is usually a quiet month for agents, and this year has been no exception. Applicant interest has dropped as the weather has warmed, but the recent performance of PCL sales property remains encouraging.

For more information on prime central London sales activity during Q2 2017 and the outlook for the remainder of the year, download JLL Residential Research’s Prime Central London Update.

Switching focus to PCL’s lettings market, oversupply has led to lower rents in Q1 and Q2. This echoes comments in our prime central London research by Lucy Morton, JLL’s head of residential agency, who observes that stock levels remain high and that rents for larger homes are softening. The good news is that the market has bottomed out, with rental value reductions dropping from -3.1% in Q4 2016 to -1.3% in Q2 this year.

As ever, Q3 is set to be the PCL lettings market’s busiest season, with students and families looking to agree tenancies ahead of the new academic year. All our offices will go in to the Autumn rush in an exceptionally strong position, after concluding 40% more deals in July this year than during July 2016.

Demand for smaller properties, suitable for young students and professionals remains strong. With a lot of choice available to tenants, our advice is that careful presentation and realistic pricing are key to securing tenants.

Further analysis of trends in rent values and tenant demand is available in our downloadable Prime Central London Update.