Prices are rising but sales falling in prime West London property markets with properties valued at over £2 million hit by an increase in stamp duty, according to the latest market report.
Crayson’s autumn market intelligence report provides a detailed overview of the property market in W14, W11, W10, and W2, and shows that the number of properties sold in the area to the end of September 2012 was 21% lower than in the same period in 2011 and 23% below peak 2007 figures.
Whilst transaction levels have been lower in recent months, properties which have sold have been some of the best in class. So far 2012 has seen the highest proportion of sales over £1,500 per square foot. Almost half of all houses and 15% of flats sold have achieved in excess of this mark. Since changes to stamp duty announced in March sales per month for properties priced between £1 million and £2 million increased from 13% of all sales to 23%. In contrast, sales over £2 million have fallen compared with pre-Budget levels.
‘The new stamp duty levy is also tempering demand from domestic buyers for homes over £2 million. Before the Budget, 60% of Crayson purchasers in this price bracket were domestic, the majority looking for family homes in our area. However, since the Budget the number of domestic buyers has fallen. Indeed, in a role reversal, 60% of properties sold by Crayson since March have been bought by foreign buyers,’ said the firm’s Nick Crayson.
Both W8 and W11 saw at least half of buyers between March and June pay cash for their properties, up from 23% (W11) and 37% (W8) in the same period in 2007.
Unlike 2007, the market between £1 million and £2 million was the most mortgage reliant in the three months to June, with almost 60% of buyers using a mortgage to fund part of the purchase.
The most significant change in the proportion of cash buyers was for properties sold for under £1 million. In this price band, 53% of buyers paid cash, the highest proportion of any price segment.
‘Compared with the market five years ago, cash purchases in our area of central London show some interesting changes. All of our areas, excluding W2 which has a very low sample size, saw a fall in the proportion of buyers purchasing with a mortgage,’ explained Crayson.
‘Experience tells us that this can, at least in part, be attributed to increases in wealthy investor purchasers. In particular, those from overseas who have been snapping up investment flats in our area in the past 18 months,’ he added.