LCP London housing analysis

LCP analyse Land Registry Data on new build sales highlighting housing in 2016 for Prime Central London and Inner London.

London Central Portfolio Limited (LCP) has analysed just released Land Registry Data on new build sales, following reports that Battersea Power Station is re-examining its “delivery priorities with a view to easing the financial burden”. The station has reportedly reached a “critical stage” and has written down its projected investment returns (IRR) from 20% to 8.29%. Some of the proposed affordable homes are being moved to a later phase in the scheme, and a review mechanism is being introduced to determine the amount of affordable housing that the scheme can viably deliver.

The analysis has highlighted the following:

Prime Central London

44% of all the new flat sales in 2016 took place in Q1 as buyers rushed to beat the deadline for the new additional rate Stamp Duty. This was the highest number of new build sales recorded for any previous quarter.

However, completed sales of new build flats were down 41.4% by the end of 2016, compared to the previous year.

Average prices for new builds also fell 8.7% to £1.9M.

The luxury end of the market (£5M+) was worst affected with an annual fall in new build sales of 57%.

In contrast, this compared with a fall in sales for PCL as a whole (old and new stock) of 29%.

Unlike new build flats, PCL as a whole also saw a 3.75% rise in average prices.

Inner London (9 inner boroughs outside (PCL).

Overall completed sales of new build flats were down 3.9% by the end of 2016, compared to the previous year. However, a significant 29% quarterly fall was recorded in Q4.

After a price surge in the first half of the year, price growth has stalled with a 2.1% fall in prices by the end of 2016.

The luxury end of the market (£5M+) was worst affected with a 51% fall in new build sales.

There was also a significant 34.6% fall in Q4 new build sales under £1M. This sector represents 88% of all new builds in Inner London.

With completed new build sales now registered for 2016, London Central Portfolio has analysed the marked effect that residential tax changes and Brexit uncertainty has had on this market. According to just released Land Registry data, new developments in Prime Central London (PCL) have been worst affected.

A 38% fall in sales was also seen for new build properties under £1M.

The distorting effect of the Government’s tax changes is clearly evident. With buyers rushing to beat 2016’s deadline for the new additional rate Stamp Duty on second properties in April, 44% of all PCL’s new build sales took place in Q1. This represented a 91% increase over the previous year and the highest number of new build sales recorded in any previous quarter.

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