25 May

London property growth falls

London property growth falls

The annual increase in London property prices fell by 2.8 per cent in April, according to new market data.

In the run-up to the general election there had been a slowdown in the London market and figures suggest annual price growth is now at its lowest rate since November 2009.

However, real estate experts are predicting the Conservative win at the election could mean a turn in fortunes for the capital's property market.

In particular, it means the so-called mansion tax will not become a reality on homes worth more than £2 million.

Tom Bill, head of London residential research at Knight Frank, explained: "Numerous transactions put on hold pending the outcome of the vote will proceed as the risk of further property taxation appears less of an immediate threat. Other sales will progress simply because the election is over and a deeper sense of political uncertainty has receded."

He added that it is not just the election that may have dampened the property market in London, with many buyers and sellers still processing the recent changes in stamp duty, so it will take time for a clearer picture to emerge.

It is also expected that key areas of London where growth has been substantial will see positive movement quickly. This includes areas such as Kensington and Chelsea, where a lack of homes means strong demand for anything that comes onto the market.

However, it is likely that the Conservative government will take steps to look at the UK housing market, with the possible revamp of current council tax bands and a change in the rules on non-dom status.

Therefore, Knight Frank is currently predicting very small growth in central London areas and three per cent for outer London.
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