According to the latest analysis by LonRes, prices were down 0.9% across all three prime areas of London, transactions fell by 1% from Q3 2016, and the quantity of instructions fell by 4%.
LonRes Prime London spans three core areas: Prime Central London (PCL), Prime London, and Prime Fringe.
Property values in PCL were down 1% year-on-year, but up 4% compared to Q2 2017. The analysis also showed that the gap between initial asking prices and achieved prices was narrowing.
Across all three prime areas the discount on the initial asking price has fallen to 8.5% from 9.1%. In PCL locations, buyers negotiated an average of 10.3% off the initial asking price in Q3 2017, down from 11.1% in Q3 2016.
The number of properties with reduced prices dropped from 41% in Q1 to 43% in Q3.
The number of properties sold in PCL during Q3 2017 was 1% down from Q3 2016, though that figure changes to a 3% increase when comparing the January to September period between 2016 and 2017.
Properties worth over £1m saw a 15% annual rise over the first nine months of 2017, while sales under £1m were 28% lower than in 2016. However, LonRes noted that the under £1m transaction numbers were distorted by investors rushing to beat Stamp Duty changes which came into force in April 2016.
Compared to Q3 2016, Q3 2017 saw a 7% fall in transactions under £1m.
Rental values and lets
LonRes recorded a 1% rise in rental values over Q3 2017 compared to Q2 2017. Prime fringe rents rose on a quarterly basis by 2.5% over Q3 2017 and annually by 1.8%. Prime London and PCL recorded annual falls of 1.6% and 1.8% respectively.
Overall, the number of properties let across the prime areas rose by 5% year-on-year in Q3 2017. PCL was the only area to see lets fall – down by 3% on Q3 2016. Meanwhile, prime London and prime fringe values rose by 6.9% and 10.3% respectively.
On an annual basis the number of new instructions fell by 4% over Q3 2017, with 23% fewer homes on the market to let compared with the same period a year ago.
This analysis comes as the Halifax Housing Price Index recorded a 4.5% year-on-year growth in house prices alongside falling confidence in the housing market – with one in five respondents thinking that house prices will fall over the next year – the highest level since October 2012.
The Halifax index also showed that quantity of new sales instructions for homes fell for the 19th consecutive month, while new buyer enquiries declined in September for the sixth month in succession.