Prime Central London property values are expected to fall 9.0% by the end of the year as a result of post-Brexit uncertainty, new research shows. According to estate agent Savills, prime Central London property prices could fall by as much as £360,000 due to post-referendum uncertainty by the end of 2016. After stabilising for the next […]
Prime Central London property values are expected to fall 9.0% by the end of the year as a result of post-Brexit uncertainty, new research shows.
According to estate agent Savills, prime Central London property prices could fall by as much as £360,000 due to post-referendum uncertainty by the end of 2016.
After stabilising for the next two years while Brexit negotiations take place, a return to growth in 2019 is forecast, with total growth of 21% in the five years up to 2021.
The prime central London markets, where values average around £4 million, have been the hardest hit by the 2014 stamp duty changes.
Prices were down 8.1% their 2014 peak by the time of the referendum, including falls of 2.2% in the first six months of this year.
The changes abolished the old system of stamp duty and help benefit anyone purchasing a home priced under £937,500. Those purchasing a home above this amount now face a bigger tax bill.
You now pay 0% up to £125,000; 2% to £250,000; 5% to £925,000; 10% to £1.5million and 12% above that.
Lucian Cook, Savills UK head of residential research, said: “We now need further small adjustments to bring buyers back to the table in greater numbers and early signs from the autumn market are that committed sellers have adjusted their prices by between 5 and 10%.
“Looking further ahead, we know the prime London markets have generally rebounded strongly after a period of adjustment. While the tax backdrop will continue to be factored into buying decisions, no other European city has the infrastructure to match London as world city and global financial centre and this should underpin a return to trend levels of growth.”
The lower value outer prime London markets, where the average house price is £2 million, are predicted to fall 5.0% by the end of 2016. Prices will then drop by 1% in 2017 before growth returns in 2019.
Total price growth is expected to be 14.6% by the end of the five years to the end of 2021, reflecting mortgage lending constraints and greater caution around financial sector job security.
