Prime central London prices slump 12pc
The latest figures from the Land Registry showed that while annual growth for prime central London remained in positive territory at 6.6% for the year to end of Q2, increased stamp duty above £1.125m and the annual tax for enveloped dwellings now extending to properties over £1m have left their mark.
Naomi Heaton, chief executive of LCP, said: “There is a fast lane and a slow lane in this market now with the brakes firmly on at the more expensive end. This comes as no surprise.
“Pre-election clouds loomed over central London for many investors at the beginning of the year, suppressing buyer activity. Ramadan and the traditionally quiet summer period has held back any conspicuous recovery.
“Coupled with some hard to swallow taxes for higher end properties, this period of subdued sales and price growth was anticipated.”
Meanwhile although average prices for ‘Flats and Maisonettes’ at £1,258,867, now stand above the £1.125m SDLT watershed, LCP’s research has shown that 59% of all sales in prime central London still take place under £1m.
Heaton added: “Those targeting the mainstream private rented sector, ducking under the £1m mark, are still making sound investment decisions. As a commercial asset class, this market tends to be far less volatile and we anticipate a strong performance as investors return to the market.
“One word of warning: current annual growth levels of nearly 12% for ‘Flats and Maisonettes’ are unlikely to be sustained. For the past four decades average growth has been 10.4% p.a. so a tapering off of quarterly growth rates is still likely, to bring prices back in line with long term trend.”