2022 was a record-breaking year for Prime Central London. Buyers spent almost £5.2 billion on homes last year, the highest amount spent for more than ten years.
But Prime Central London has not been immune to political and economic uncertainty that has impacted the UK market in recent months. On one hand there is less reliance on debt in the prime market than in mainstream, meaning fluctuations in interest rates have less of an impact, however increased uncertainty, and a higher proportion of discretionary purchasers in PCL have resulted in prices falling back in Q4.
The JLL Prime Central London Index recorded a 3.5% quarterly fall in Q4 2022. With prices ending the year 2.4% lower than in Q4 2021.
The number of properties on the market at the end of Q4 2022 fell this quarter, in line with usual seasonal activity. At the end of Q4 2022 there were 2,847 homes on the market in PCL, 3% higher than the same point a year ago and down 9% compared to the end of Q3.
While prices fell in the fourth quarter there was little sign of a slowdown in sales activity. Sales volumes were 15% higher than Q4 2021, although the stamp duty holiday distorted figures last year. Taking 2022 in its entirety shows transaction volumes rose 6% on 2021, with 2022 the busiest year for PCL sales since 2014.
For the rental market stock levels across Prime Central London remain below historic levels. The number of properties available to let at the end of Q4 2022 was 13% higher than at the same point in 2021, when stock levels bottomed out, but remain 45% lower than in 2019.
Almost half (48%) of the properties let by JLL within Prime Central London in Q4 2022 were renewals, up from 37% in Q4 last year and 24% in 2019. With high rates of renewals continuing to impact both new lets agreed and returning stock levels.
Rents plateaued in Q4 2022 after six quarterly increases, the JLL Prime Central London Index falling 0.5% in Q4 2022 compared with the previous quarter. But rents are still higher than they were a year ago. The JLL Prime Central London Index recorded
a 6.1% annual increase in achieved rents in the fourth quarter.
Marcus DixonDirector of UK Residential Research |
Lucy MortonHead of UK Residential Agency |
Neil ShortDirector – PCL lettings |