Interpreting micro-trends in the fast-moving London property market is a notoriously inexact science, yet the latest LonRes sales figures for Belgravia and Knightsbridge are encouraging.
Almost all the key indicators are moving in the right direction.
The average achieved price July to September is up 0.6 per cent on a year ago – a modest rise, certainly, but in the wider context, a significant sign of returning confidence. Average flat prices in the area have risen by 4.5 per cent in the past five years, with buyers paying £97 more per square foot than they did in 2012.
Again, the rise is hardly spectacular, but it shows the increasing interest in the prime central London property market.
Perhaps the most striking statistic relates to the volume of transactions between July and September – up 37 per cent on the equivalent three-month period last year. This bears out what we have been experiencing first hand: that clients who were sitting on their hands at the time of the EU Referendum are now prepared to make their moves in the market, undaunted by uncertainties over Brexit.
Buyers have significantly more properties to choose from – the number of properties available in the area is up 3.7% on a year ago – which is another positive sign.
“Clients who were sitting on their hands at the time of the EU Referendum are now prepared to make their moves in the market”
We take particular encouragement from the fact that, not for the first time, Belgravia and Knightsbridge are out-performing central London as a whole. 21.6%of properties in the area sold within three months during the third quarter of 2017, compared with 20.2% in the whole of central London.
As always, the better the area, the stronger and more reliable the demand. A Belgravia town house will never go out of fashion.
One of our mantras in the past two years has been that properties need to be priced realistically: if owners misread the market and overvalue their assets, they will be disappointed.
This simple fact of economic life is highlighted by another stand-out statistic in the LonRes report: the fact that properties which sold between July and September achieved a sale price of, on average, 8.3% below the initial asking price.
Many homeowners have clearly got the message. Of the properties currently on the market, 43.4% have been reduced in price, yet, others prefer to wait for an upturn in the housing market.
The good news is that, after a period of uncertainty over the past twelve months, confidence is gradually rising as investors return to prime central London.
James Bailey is the Chief Executive of Henry & James, Belgravia and Chelsea’s premier estate agent for residential sales and lettings.