Residential property prices in London’s prime locations will fall by 9% this year and not rise again until 2019 as increased property taxes and a lack of clarity around the details of Britain’s exit from the European Union have an adverse impact on the market, according to Savills.
Home prices at the upper end of the market in prime locations in central London have been falling for the past two years, and the estate agency expects this trend to continue over the next few years as purchasers use Brexit uncertainty to negotiate lower property prices.
“Vendors are increasingly accepting the nature of the market but that needs to feed through further into asking prices,” said Lucian Cook, director of residential research at Savills.
Cook said that “two further years of uncertainty” meant that there would be no return to “any serious price growth” until talks on Britain’s divorce from the EU are concluded.
Savills forecast that that when property prices in prime London do rise in 2019 it will be by 8%, although the company was keen to stress that this will depend on the level of demand which will be dictated to some degree by the level of taxation post-Brexit.
Cook added: “It probably means that London remains an attractive place to invest in prime housing, with a tax environment that is not prohibitive to those looking to acquire residential real estate.”