Average prices in Prime London Central (PLC) rose 3.7% over the quarter, leaving them up 15.3% over the year and at a new high of £1,350,101.
Naomi Heaton, chief executive of LCP, says: “This is 5.5 times more than the average price of £249,958 in England and Wales where prices have shown little real term growth, increasing by just 3.5% over the year.
“Q3 normally shows a buoyant picture for PLC, registering the completion of sales transacted during the active spring and early summer period and this was no exception. The average price of a flat broke the £1m barrier for the first time, reaching £1,024,250 – an increase of 5% vs. Q2 2012.”
Heaton said that despite the price growth seen, overall transactions continued to drop by almost 9% vs. the same time last year.
She added: “Whilst this reflects a desire by investors to hold rather than sell a strong performing asset, undoubtedly the uncertainty caused by the tax changes announced in the 2012 budget and further announcements to come, have led some investors to adopt a ‘wait and see’ attitude.
“The general increase in Stamp Duty Land Tax to 7% for properties over £2m has had a much more marked effect on Greater London, predominantly a domestic market, than on PLC (defined as the City of Westminster and the Royal Borough of Kensington & Chelsea). Sales of properties between £2m and £5m in Greater London have fallen by a staggering 53%, reducing not increasing the Exchequer’s SDLT take. On the other hand, in PLC, despite the overall fall in transactions, the sale of properties over £5m has gone up from 32 in Q3 2011 to 60 in Q3 2012, amounting to an 88% increase.
“The Autumn Statement and the end of the consultation period in December should clarify the property tax legislation, at which point a firm direction should be indicated for future investment strategies.”
