30 Mar

London sees fall in high-value properties

London sees fall in high-value properties

The capital has seen a fall in property values in some of the most affluent areas in recent months.

Figures show house prices of the top ten to five per cent in terms of values have dropped by 4.3 per cent in the year ending March 2015, with areas in the South West of London falling by 2.6 per cent.

The research from Savills suggests that the forthcoming general election could be leading to a period of uncertainty for the usual buyers of prime real estate.

It also thought the recent stamp duty reform announced at the end of last year has played a role in the market downturn.

However, it is expected that prices will recover in the affluent boroughs with a 23 per cent rise in prices over the next five years - assuming current tax levels are unchanged.

"We forecast in November, uncertainty regarding the general election and the potential for further taxation of high value property have contributed to a subdued market in the first part of 2015," said Lucian Cook, head of UK residential research at Savills.
 
He added: "The stamp duty changes came after five and a half years of sustained price growth for prime London property. This segment of the market is now looking fully taxed and sellers are having to factor in price adjustments equivalent to the stamp duty increase.

"While we believe the fundamentals of demand and supply remain sound, the short term outlook for the prime property market is heavily dependent on the extent to which the election brings political certainty and whether the sector is subject to further taxation. Certainty will allow buyers and sellers alike to take account of the impact of any fiscal change."

The fall in London prime prices is in contrast to an increase in interest in country markets close to the capital, with values of homes below the £2 million threshold in the prime regional markets rising by 1.1 per cent over the first three months of the year.ADNFCR-1222-ID-801781674-ADNFCR

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