Price recovery gathers pace in prime London sales markets
March 2022 PCL sales index: 5411.7
March 2022 POL sales index: 270.7
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Prices continued their upwards trajectory in prime London sales markets in March as demand in the capital rebounded after the pandemic.
In prime central London, average prices grew by 2.1% in the year to March, which was the strongest annual rate of growth since May 2015.
In addition to the re-opening of the economy, relatively good value is driving demand In central London after six years of subdued activity, as we explore here in more detail.
Average prices in PCL are 16% lower than they were at the start of 2016. That compares to a 9% decline in prime outer London and a 13% increase in country markets.
Underlining the strength of demand, the number of new prospective buyers in PCL was 84% higher than the five-year average in the first quarter of this year. That compared to an increase of 71% across the whole of
London and 42% in UK regional markets.
The key influence on the future performance of the market will be the return of international buyers.
However, given the current extent of lockdowns in some parts of the world, the return is likely to be more gradual than transformational. This suggests stronger price growth will only return next year when overseas demand starts to exert more of an impact.
The opposite is likely to be the case for prices in prime outer London, which we expect to peak this year.
Average prices increased by 4.4% in the year to March, which was also the strongest rate of growth since May 2015.
While prime outer areas of the capital continue to benefit from the so-called ‘race for space’, we expect demand to soften as mortgage rates rise and the cost-of-living squeeze intensifies. Rising supply will also increase downwards pressure on prices.