Activity in prime central London property market stable, says latest monthly report

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Activity across all prime price ranges in central London are stable although sales at the top end of the market are down, according to the latest estate agent research. Overall transactions between £2 million to £5 million have increased by 11.7% this year but sales above £5 million are down by 5.5%, the latest sales and lettings report from W.A. Ellis shows. But the sector’s lettings market is buoyant with a 14% increase in tenancies starting in August compared to the same period last year. ‘If we compare the current year's activity from January to August with the same period in 2007, within our area of expertise of Chelsea, Knightsbridge, Mayfair, Belgravia and Kensington, we see a 35% diminution in activity,’ said Richard Barber, partner at the prime central London estate agency. However, he pointed out that when the inflation that the capital has enjoyed over the last four years, some 18.5% in the last year alone according to Land Registry data, a more interesting picture emerges. Property transactions between £2 million and £5 million have increased by 17.5% and those in excess of £5,000,000 have increased by 72% on 2007. ‘Whilst the media are reporting more bearish sentiments across the market and reduced levels of new buyer registration, we should not necessarily predict that the bubble is about to burst,’ said Barber. ‘Activity across all price ranges is very stable, and our research suggests that between January and August 2013 there were 1,288 transactions, and in the same period in 2014, 1,242, a reduction of only 3.5%,’ he explained. ‘Whilst the Damoclean sword of mansion tax continues to hover over the market, the figures suggest that it has not as yet impacted. Indeed, sales between £2 million and £5 million have increased by 11.7% this year. However, sales of properties over £5 million have diminished by 5.5%. ‘The reduction in activity over £5 million is perhaps indicative that the foreign investor may tolerate a tax of £15,000 per annum, based on the current ATED charges, but not the more punitive £35,000 charge per annum currently applied to properties held in company names with values in excess of £5 million,’ he added. But he pointed out that there is always a healthy appetite for the right product, and if vendors' expectations are realistic, there is no reason why we should not enjoy a normal market. Lucy Morton, senior partner and head of lettings at W.A.Ellis, said that the firm has been surprised by the level of activity over what is usually a very quiet month, with a 14% increase in tenancies starting compared to the same period last year. ‘The seasonal student market is in full swing, with students focusing on finding accommodation for the upcoming year and demand exceeding supply,’ she explained. Overseas tenants are even agreeing tenancies without seeing the property. Clients living in California were talked through the property over the phone and using Face-Time on an iPad, and went on to complete, as did two students from Norway… Taylor Scott International

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