Activity in prime central London (PCL) has stalled following political uncertainty and the Brexit deadline being pushed back, the LCPAca Residential Index has found.
In October, monthly average prices increased by just 0.3% to £1,772,216. Transactions remained static at 3,191 annually, an average of just 61 a week.
Naomi Heaton, chief executive of LCP, said: “On the bright side, this performance is an improvement on a year that has seen prices fall by 1.9% and transactions by 11.2%.
“This might suggest that price falls seen over the last few years are drawing to an end.
“But there is now another big question mark in the shape of the forthcoming General Election. A working Labour majority could stifle recovery.
“Any other outcome may result in the long awaited ‘bounce’, despite the Conservatives’ pledge to increase stamp duty for overseas buyers.”
New builds tell a different story. Transactions fell a further 7.5% over the month to 260 for the year, representing just 8.1% of all sales.
Meanwhile prices dropped by 8.6% to £2,873,108. However, this could all reverse quickly as some exclusive new developments reach the market.
The Greater London market has seen monthly prices rise by 1.2% to £620,753, bringing quarterly growth to 2.2%.
Monthly transactions increased by 1.5% meaning quarterly was 2.1%.
Heaton added: “This momentum is encouraging following a sustained period of falling transactions and softening prices.
“The political environment post General Election on December 12 may consolidate this position or cause market stagnation, dependent on the different fiscal policies brought in by a potential Conservative or Labour government.”
Despite the positive performance of the Greater London market, the new build market continues to contract.
Transactions in October fell by 5.6%. This equates to a staggering 28.1% fall over the year.
In England and Wales, excluding Greater London, October saw monthly price growth for existing stock of 0.5% and annual growth of 1.5%.
This has led to average prices in October reaching an all-time high of £259,417.
Transactions have also begun to pick up with a 1% rise in October and a 0.5% increase over the year, following a gradual slide since 2015.