Cash buyers – who are not as exposed to concerns around rising interest rates – accounted for 71% of PCL purchases so far this year, helping prime London prices to remain “remarkably resilient” in the face of escalating mortgage costs and a wider market slowdown. Average home prices across London’s prime markets fell a marginal -0.2% on the quarter, and -1.0% on the year, according to the latest index, leaving values 3.9% above their pre-pandemic level. Prices have held up better in PCL than in outer prime London, “indicating a growing divergence between cash and equity rich buyers and other groups in their ability to transact, and between the very top end of the market and lower value segments.” Just over a third (35%) of property sales in Prime Outer London have involved cash buyers in the year to date, suggests agents While the top-end of the capital’s property market remains pretty resilient, lower value homes in prime locations – which are typically more exposed to debt – are being more affected by escalating borrowing costs. Average prices in the £5mn+ segment have remained flat through the last year (-0.1%), while the £500k-£1mn market has seen some falls (-2.1%), and the sub-£500k segment has fallen further (-2.5%). Corresponding with this, “best in class” properties seem to be holding up best in more fragile market conditions. Properties considered in immaculate condition across prime central London command an average price of more than £2,000/ sq ft, 37% higher than those considered to be in a poor condition, compared to a premium of 25% around 10 years ago.
