This is the first time in over four years when London has not been on the top spot. What to make of it? Sorry to disappoint those who like a nice dramatic story, but while many have become used to London’s primacy, we’ve been here before.
London has had some unique challenges with the threat of a Mansion Tax (now binned) while the Chancellor’s 12% Stamp Duty Land Tax rate on properties costing in excess of £1.5m remaining is very much alive and well.
Since 2010, prices have risen well ahead of the rest of the country, particularly in Central London and some of the more swanky parts of town such as Kensington and Chelsea. Homeowners have enjoyed this ride while on the other hand, prospective purchasers have watched themselves being marginalised and forced to look elsewhere for affordable property, causing a ripple effect.
A tale of two cities
We’re not seeing any crash in London prices, we are simply seeing the wave spread out from these prime locations and uplift the areas it touches. To some extent we have a tale of two cities, West and Central London currently being a little less racy price wise – while Eastern boroughs play catch up, with some of the highest percentage rises in regions such as Barking and Dagenham.
Realistically, the East is starting from a much lower base of capital values and arguably has been kicked off started in part by a number of large new build developments. These locations are offering the flats that are realistically often the only property a prospective London first-time buyer can get anywhere near.
Waves often follow one another, we’re perhaps in the dip between two as far as London is concerned, but the chances of another coming along seem pretty strong to all.
Richard Sexton is business development director at esurv
