In the first quarter of 2016 prices rose by 7.9% from the previous quarter and transactions increased by 3.9% as buyers rushed to beat the 3% stamp duty surcharge coming into force on 1 April.
Typical house prices in Greater London have eclipsed £600,000 after increasing by 14% year-on-year, London Central Portfolio analysis of Land Registry data shows.
In the first quarter of 2016 prices rose by 7.9% from the previous quarter and transactions increased by 3.9% as buyers rushed to beat the 3% stamp duty surcharge coming into force on 1 April.
In Prime Central London transactions shot up by 33% in the quarter, bringing the average house price to £1.67m after an increase of 2% from the last quarter and 4.7% year-on-year.
Naomi Heaton, chief executive of LCP, said the increase in sales wasn’t surprising given the stamp duty surcharge.
But she warned: “This one-off anomaly is likely to be steeply eroded next quarter, magnifying the contraction in sales already anticipated across the rest of the year.”
She reckoned the slower pre-EU referendum market still presents investors with opportunities. Heaton said: “To capitalise on the current conditions, purchases should be focused on the sub-£1m sector of the PCL market. This has been far less affected by recent tax changes and future price growth is expected to be robust.
“As has been demonstrated time and time again, Central London slows down in the face of investor uncertainty; for example after 911, during the Iraq war and in the face of a weak stock market in the early 2000s.
“All the evidence, however, suggests that the market rallies quickly thereafter, particularly at the lower price points.
“In 2010, prices bounced back post credit crunch by 22.7%, following a fall of 16.3% the previous year.”
