26 Nov Prime central London property market unlikely to see growth until Q3 next year
Potential sellers in central London’s prime property market are staying put and using the money they would have paid in stamp duty on refurbishing their present home, it is suggested.
Official statistics show that price growth in this sector of the UK’s property market has slowed with changes to stamp duty announced a year ago blamed.
The latest analysis report from Sandfords, a central and North West London agent, confirms that this has been the case.
‘The stamp duty changes that took place towards the end of 2014 have depressed the market across the board in prime central London and forecasts for next year have altered in light of this,’ said Andrew Ellina, the firm’s director.
‘I predict that price increases in the prime central London market in 2016 will be modest with some areas experiencing growth and others seeing prices remaining fairly static,’ he added.
He explained that families in particular are choosing to carry out alterations rather than put their home on the market and the firm expects this to continue into the New Year.
The biggest price band that has been affected is from £1.5 million to £5 million. For properties below the £1.5 million the stamp duty changes have not been too onerous. For anything above £5 million, purchasers have sufficient funds and are therefore not too bothered about a heavy stamp duty bill.
Ellina believes that unless something significant happens that we cannot foresee at the moment, there will not be a crash, but the global economic outlook combined with tax changes in the UK and the perceived high current values will subdue demand and this will take some time to work through. ‘I do not anticipate sustainable growth returning until the third quarter of 2016,’ he said.
Regent’s Park and Marylebone are still undervalued in comparison to Knightsbridge and Kensington, but are becoming increasingly more fashionable and desirable, the report suggests. Other areas of growth will be in Fitzrovia and Kings Cross which are rapidly changing out of all recognition.
‘The capital is undoubtedly still one of the safest places in the world to live and invest, and will continue to be a top investment location. This year, buyers from all over the world including, the Far East, China, India, Greece and Europe have been heavily spending their money and buying properties in London, and it looks like they will still be big players in 2016,’ Ellina concluded