07 Aug Prime central London property prices continue to rise
Residential property prices in prime central London hit a new high in July, but the pace of growth is slowing, according to the latest Knight Frank report. The property consultancy reports that the average price of a home in prime central London appreciated by 0.5% in July, marking the most modest monthly rise since October 2010.
Central London property prices are currently 13% higher than the previous market peak in early 2008, thanks to low housing supply in relation to high demand from national and international homebuyers, as the capital retains its reputation as a key destination for investors looking for ‘safe-haven’ assets.
However, the slowdown in the pace of growth, particularly at the high end of the market, is owed mainly to higher stamp duty and the uncertainty surrounding proposed tax changes for houses worth £2m and over.
Liam Bailey of Knight Frank said: “There is emerging evidence that the rises in stamp duty are having an impact on the market. And the on-going consultation on the annual charges and Capital Gains Tax which will be levied on property worth £2m+ held in company structures, is creating uncertainty and causing some would-be buyers and sellers to adopt a ‘wait and see’ attitude. The final decision on the consultation will be announced in this year’s pre-Budget report or next year’s Budget.”
But with the focus of the world on London during the Olympics, Bailey believes that the capital’s housing market still remains a key destination for investors “looking for safe-haven assets”. “The continued rise in interest from prospective buyers is up 23% in the three months to July compared to the previous quarter,” he added.