Central London residential market holds steady despite uncertainty

The Prime Central London (PCL) housing market has shown resilience despite jitters about the upcoming Autumn Budget, according to research from global property advisor JLL.

The business noted that while prices picked up in Q3 – particularly in the sub £2 million market – a lack of clarity ahead of the Chancellor’s statement has left many postponing purchases.

JLL’s PCL Index showed a 1.8% quarterly increase in prices in Q3, though declines earlier in the year mean prices are 3.4% down on 12 months ago.

The number of applicants registering with JLL interested in purchasing PCL homes rose 39% year-on-year in Q3, with 49% more in September alone compared to last year.

JLL notes that prospective purchasers have been delaying as a lack of clarity on non-dom rules, capital gains tax and inheritance tax ahead of the 30 October statement have dragged on confidence. This has been most evident at the top end of the market. Q3 saw a 17% annual increase in sales between £2 million and £5 million and a 7% increase under £2 million. But sales of £10 million or more fell 37%, with 16% fewer transactions between £5 million and £10 million.

The business’ PCL Rents Index showed rents rose 1.6% quarter-on-quarter, but are largely unchanged on a year ago.

Marcus Dixon, director of UK residential research at JLL, said, “Despite moving from election uncertainty through to pre-Budget trepidation, the PCL housing market has shown resilience across both sales and rentals.

“Many are pricing in uncertainty until the Budget but once we have more clarity on Labour’s plans and buyers understand the implications we expect to see activity increase. London’s residential market has proven resilient in recent years. We don’t expect that to change anytime soon.”