London’s expensive boroughs show signs of life

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Kensington buildings
A wealthy area in Kensington, that is just south of Kensington High Street. Taken on April 2006 -- WIKIPEDIA.ORG

LONDON — Prime London property has had a tough year, but there are signs that the slump is easing.

The capital’s three most expensive boroughs — the City of Westminster, Camden, and Kensington and Chelsea — each saw sales jump by more than 20% in the third quarter from the same period in 2016, according to a report from LSL Acadata published Monday.

The year-earlier period was in the immediate aftermath of the Brexit vote, and the surge indicates that “momentum is returning to sales in prime central London following the downturn in transactions experienced during late 2016,” the report said.

“Movement at the top end of the market helps to increase activity all the way down the housing chain,” said Acadata’s Peter Williams and John Tindale.

Nationally, the report may also be a cause for optimism. While November’s 0.9% annual gain in prices was the slowest since April 2012, and down from 6.3% a year ago, they increased from the previous month for the first time since March.

The signs of improvement buck a trend of pessimistic reports, particularly regarding London. A survey by the Royal Institution of Chartered Surveyors (RICS) indicates national prices are stagnating, while Rightmove said London values are likely to fall another 2% in 2018. In the RICS survey, brokers flagged a range of reasons for the stagnation, including Brexit uncertainty, political instability and November’s interest-rate hike by the Bank of England.

Even in Acadata’s report, the picture isn’t entirely rosy. Prices in the Greater London area were down 3% from a year ago in October, with the City of Westminster leading losses with an 18.2% drop. Detailed regional data are published with a one-month lag.

London’s market also remains a drag on the UK. The annual change in prices reported for November would have been 3.3% without the capital and the southeast. — Bloomberg