The last three months have seen a continuous decline in property prices in the UK, for the first time in four years. The average property value dropped £1,000 from June to £214,140 in quarter three, with a 0.5 percent drop. Property prices were down 6.8 percent in the second quarter compared to the same period last year, and down 2.5 percent in London. Yet, quarter three was up 5.7 percent compared with that of 2015.
We have also seen a 15 percent decrease in the number of new homes registered in the UK, since the EU referendum, with a substantial decline of 62 percent in London. However, house prices started to rise again in September, with the average asking price entering the market at a 0.9 percent higher rate than August, resulting in a £309,122 average. London has experienced entry prices at a 2.4 percent increase and an average of £645,833.
According to the Royal Institution of Chartered Surveyors, house prices will continue to rise and will do so at an increase of 3.3 percent on average for the next five years.
How has house price growth been affected?
Despite the house price fluctuations, the national obsession with the property market continues as it drives the UK consumer economy. Following the referendum, estate agents and brokers experienced a number of buyers backing out of transactions and an increase of international buyers swooping in to replace the loss.
The growth of house prices declined one month following the EU referendum, with a 1.4 percent fall from a 9.7 percent annual growth rate to 8.3 percent in July. There was a slight increase in August with a 0.6 percent higher asking price entering the market, than in July. The high demand and short supply of property continue to provide the necessary increases in property prices in the UK, with increases as high as 12.3 percent in London.
Overseas buyers will continue to flock to the UK as the value of the pound keeps dropping. Currently, a US buyer can benefit from discounts of up to 10 percent, and UK buyers are negotiating the already average discount of £25,000 on a UK asking price, as reported in May, which was already up £4,000 compared with January, even further.
The £10 million and over property market
The property market in prime central London has experienced 32 percent fewer transactions compared with the same period last year and 44 percent compared with 2014, but interestingly, properties in the £10 million and over market have only fallen 19 percent from last year and 35 percent from 2014. Granted, there is a lot more choice for buyers looking at the £10 million and over market right now, with a 25 percent increase in properties on the market across prime central London since August 2016. Bringing properties in this price range up from 100 to 125.
According to a new report from Wetherell, the Mayfair property market is currently boasting £750 million worth of available residential property, with 161 listings recorded at the beginning of August this year. This is a 25 percent increase overall from 2015 and 67 percent from 2014. Drilling down further, there are 37 percent fewer houses on the market compared to last year, but 40 percent more flats. Asking prices have also reduced in the area, with 45 percent of flats and 36 percent of houses reducing their prices since they were first listed. However, properties sold so far this year have only seen a three percent drop in achieved asking prices over the last three months, dropping from 92 percent in 2015 to 89 percent now.
The market remains strong in Mayfair with the amount the area has to offer and with increased stock levels and only a slight waver in asking prices, buyers can be confident when buying in the exclusive neighborhood.