Capital values in Prime Central London held steady during September 2018 and are now 3.8% below where they were a year earlier according to the Savills index. And 18.4% below where they were before the downturn in June 2014.

With uncertainty surrounding the shape that Brexit will take and its economic consequences, it is not surprising that the market remains price sensitive and largely needs-based.  Where purchasers  are only active when they can see that a property represents good value. As a consequence, property is beginning to look relatively good value and there is a ‘flight to quality’ where well-appointed property that is appropriately priced continues to sell.

There outlook for capital value growth remains weak as we head towards the end of the year and the UK’s March exit from the EU.


In a polar opposite, and boosted by a limited supply, Prime Central London’s private rental market continues to experience strong rental growth, with rents up 4.1% on September 2018 levels, according to Savills. This is alongside shrinking average ‘discounts’ applied to asking prices, which would suggest rental price growth will continue in the coming months. And the latest RICS market survey recording falling new instructions and growing tenant demand from London Surveyors in July.

There is a growing body of evidence suggesting a non-professional investor sell-off is underway. The net change in the number of outstanding BTL loans is now falling some way below the number of new BTL loans issued for property purchase. While a degree of this change may be due to landlords paying off debt in response to the recent reduction in tax relief for financing costs, it would be safe to presume that there would also be a similar drop in new entrant data.

New purchases of BTL properties continues to fall, with the total number of BTL loans in the first half of this year down 12% o2017 levels. BTL borrowing now accounts for just 7% of house purchase lending.

Source: Savills

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