London prime property prices ‘to stall until 2019’
The latest report from Savills shows that prime property prices in central London will not return to growth until 2019.
Lucian Cook, head of UK residential research at Savills, added, “The current situation is reminiscent of the 2002-to-2004 post-bull-run period, when a less significant financial shock combined with an uncertain geopolitical backdrop. Prices then fell a total of 10 per cent. "We know the prime London markets have generally rebounded strongly after a period of adjustment. While the tax backdrop will continue to be factored into buying decisions, no other European city has the infrastructure to match London as a world city and a global financial centre and this should underpin a return to trend levels of growth."Further price adjustments are needed to make the market more fluid in London. Two further years of uncertainty, as the government’s crack negotiating unit tries to extricate the UK from the EU, are also likely to limit the prospect of any serious price growth over that period.” In the second tier of the prime outer London markets, where the average house price stands at £2 million, Savills is predicting price falls of 5 per cent this year, more than offsetting the 2.3 per cent rise recorded in 2015. A further fall of 1 per cent is forecast for 2017.However, by the end of 2021, total price growth is expected to be 15 per cent “reflecting mortgage-lending constraints and greater caution around financial sector job security”.
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