Prices of London’s Most Expensive Homes Won’t Rise Until 2019
he prices of London’s most expensive homes will remain depressed until 2019, suffering from a cocktail of stamp duty hikes and post-referendum uncertainty.
The first post-Brexit forecast for the prime central London housing market from Savills suggested there will be a 9pc fall in house prices this year, followed by two years of flat prices.
It said that in 2019, prices in the capital will start to rise with an increase of 8pc.
This is far less downbeat that estimates from Société Générale soon after the referendum, which claimed that house prices in the most expensive postcodes of central London could fall by as much as 50pc.
Homes in Savills’ prime central London bracket cost an average of £4m, across well-heeled areas such as Notting Hill, Knightsbridge, Chelsea and Mayfair.
This part of the market has been slowing since last year, when it was hit by stamp duty hikes, and prices will need to be slashed to bring buyers to the table, said Lucian Cook, head of residential research at Savills.
He added: “The market will inevitably remain susceptible to fluctuations in buyer sentiment, but there is nothing to suggest the impact of the vote to leave will echo that of the global financial crisis.”
According to the property data company LonRes, prime central London for dollar buyers is at its most affordable since 2012 due to currency fluctuations and price reductions. The average price paid per square foot for dollar buyers has dropped by 29pc to $2,238 since the peak in 2014.
Savills also said that the wider prime London area, defined as homes in affluent areas in the south-west, west and north-west of the capital priced at more than £1m, will see a similar forecast. House prices here are due to fall 5pc in 2017, 1pc in 2017, before flattening out in 2018, and rising 6pc in 2019.
Mr Cook added: “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.”