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Prime central London property shows sign of recovery

The number of prime London properties more than doubled in the last quarter with greater certainty following the general election.

Research from Savills reveals there were 109 sales of prime London properties worth £5 million or more in the last quarter of 2019, more than double the number sold in the third quarter.

There were 310 sales of prime property during 2019 with 54 in the traditionally quiet month of December, the highest recorded since the 2014 peak.

Sales of properties worth £20 million or more in the fourth quarter were a record number of 18 compared to the total for the year of 35.

These types of homes are out of reach for the domestic market of first time buyers and buy-to-let investors that will look for value in up and coming boroughs of outer London.

Property values down by fifth since 2014

The impact of the EU referendum with political and economic uncertainty has seen the values of prime central London property reducing by -20.5% and prime outer London homes down -8.4% since 2014.

The table from Savills showing the change in values of prime property in central and outer London for different periods.
Periods Central London Outer London
Quarter 0.0% 0.2%
Annual 2019 -1.8% 0.0%
Annual 2018 -4.2% -2.8%
Since 2014 peak -20.5% -8.4%
Lucian Cook Savills head of residential research said, prime central London prices have looked good value both in a historical and global context for some time, particularly for dollar buyers.

In prime outer London property values are a median of £1.2 million with demand generated from the domestic market rather than international and more sensitive to interest rate changes.

For wealthy home movers lower prices for prime outer homes could be an opportunity to buy at a discount in a market as Savills predicts a 1.0% rise in 2020 and 11.5% over five years.

Positive outlook for London

In the fourth quarter of 2019 the total value of £5 million homes sold was £1.3 billion exceeding the third quarter by 133% or £557 million and 11.3% higher than the same the fourth quarter 2018.

Lucian Cook said, Brexit related uncertainty is expected to cap growth across prime central London at an average of 3.0% in 2020, with growth over five years totalling 20.5%.

For existing homeowners with considerable value in prime London property allows the equity release buyer to access money using a lifetime mortgage and gift to family members.

If you are a remortgage buyer living in prime property this gives you the opportunity to release capital which you can use to improve your home such as adding an extension or new kitchen.

The current recovery still leaves 2019 sales volumes down -6.9% when compared to 2018 and -8.8% for 2017 with uncertainty remaining over the Brexit deal negotiations.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as consolidate debt, for home improvements or holidays.

Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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