A slump in super-prime home values in London is rippling down the luxury market.
Sales values per square foot for houses priced between £2m and £5m fell by 8.4 per cent in the second quarter from a year earlier as political uncertainly deterred potential buyers, according to data compiled by researcher LonRes. Selling prices for properties over £5m, fell 3.2 per cent.
“The very top end fell first and hardest on higher stamp-duty charges and the vote,” Marcus Dixon, head of research and data analysis, said. “Now, with further political uncertainty, we are starting to see falls filter down into prime central London.”
Sales-tax increases and the UK’s decision to leave the European Union roiled London’s high-end luxury-property market last year. The loss of ’s parliamentary majority following the misfired snap election, also added to the uncertainty facing buyers at the lower end of the luxury-homes market.
“There is a lack of urgency in the market which, combined with considerable buying costs, means many who would have transacted have stayed in their current properties instead,” Mr Dixon said. While sales across the prime central London market are similar to 2016, they are down 40 per cent from three years ago, he said.
Savills expects prime central London property values to stagnate this year and next before increasing by 8 per cent in 2019. Values fell 2.1 per cent in the first half and are down 14.4 per cent from their 2014 peak, according to the firm’s estimates.