Coutts, the wealth manager and private bank has today released the latest findings of its London Prime Property Index (CLPPI). CLPPI analyses the buying activity of Coutts clients to determine the London prime property market performance and takes a detailed look at more localised trends.

The 3.6% rise in prices for London prime property in the last three months of 2020 brings prices back to just 0.6% below where they were 12 months prior, meaning the prices were largely flat across the whole of the year, indicating that “London remains a desirable destination” according to Coutts’ Head of Asset Management, Mohammad Kamal Syed.

Coutts’ data reveals that across prime London there are 16.2% more properties under offer now compared to a year ago, driven by a spike in activity seen after the first lockdown which has carried on into the last three months of the year – with transaction volumes 24.5% higher in Q4 than they were in Q3.

Commenting on the feverish property market that bubbled up after the initial lockdown period, Coutts Chief Executive, Peter Flavel, said, “Far from putting their property plans on hold, we’ve seen our clients re-assessing how and where they live in response to the pandemic and lockdowns. I’m proud that we’ve been able to help them make their plans a reality during the unique circumstances of the last six months.”

Competition among buyers remains high, as can be seen from data on prices as well as average discounts and listing times. Average discounts, for example, fell to -7.9%, the lowest figure seen since the index began, and down from -9.5% a year ago. It now takes 129 days on average to sell a property across prime London, down from 150 days a year ago. This too, is the lowest figure seen since the Index began.

Competition appears strongest in outer prime locations, where property is selling fastest. In Hammersmith & Chiswick, for example, average discounts are now at -4.5% and in Kings Cross & Islington the average discount is -4.7% – significantly lower than the prime London market overall.

In fact, prices in some outer prime markets are not too far away from peak levels. For example, in Hampstead & Highgate prices are now just -1.5% below the 2014 highs, while in Battersea, Clapham & Wandsworth prices are -5.9% lower.

Parts of prime central London look cheap relative to historic price levels (-12.5% versus 2014’s peak) too, with buyers in in central London markets able to negotiate heftier discounts – those in Mayfair & St James’s, St Johns Wood, Regents Park & Primrose Hill and South Kensington on average negotiating double-digit discounts compared to the average -7.9%.

Though the market has largely corrected itself, Coutts does expect it to dip slightly in the coming weeks. Mohammad Kamal Syed, Head of Asset Management said: “Looking forward, we expect the volume of new listings to fall in Q1 in light of the latest lockdown. Many vendors will be nervous about having agents and prospective buyers traipsing through their homes.”