You are here: Home - News -

Prime London property prices rise just 0.5% in 2015

by:
  • 22/12/2015
  • 0
Prime London property prices rise just 0.5% in 2015
Prime London House prices fell by an average of 0.8% in the final quarter, leaving them 0.5% higher than at the beginning of the year.

The marginal increase in growth is due to the 2.2% growth in prices of property over £2m, an increase of 1.7% since last year, according to research by international property adviser Savills.

However, prices have fallen in all of the London sub-markets above this price level. The largest decrease can be seen in the £10m+ market, where prices have fallen by -7.5%.

Across the board, prime central London property prices have fallen by -6% since last year.

Lucian Cook, head of UK residential research, Savills (pictured), said: “This reflects a continued adjustment to a less hospitable tax regime and successive increases in Stamp Duty rates in particular. This is particularly impacting the higher value markets of prime central London.

“Since the credit crunch, it has been common practice to index price growth in prime London to the previous peak of 2007/8. It is now clear that 2014 is the new ‘peak’ reference point for a market that has continued to adjust to higher taxation, introduced at a time when the market was already looking fully priced,” he said.

Cook added that transaction levels for the first 11 months of the year were 75% of the levels seen in 2014 for stock sold over £1m.

“In addition, there is emerging evidence of greater activity in December among investors and second home owners keen to avoid the 3% Stamp Duty surcharge that applies from 1 April next year. This suggests that where stock is priced appropriately there is still a market, particularly for best in class.”

Savills expects prime London values to remain broadly flat through 2016 and most of 2017, before gradually returning to trend growth, with a five year forecast of 20% growth across all of the prime capital markets.

Beyond London, prime housing markets have seen an annual price growth of 2.4%.
The largest increase (4.4%) can be seen in urban locations such as Beaconsfield, Cambridge, Bristol’s Clifton, York and Chester.

Rural locations have seen a much more modest annual increase of 0.7%.

Prime regional house prices are forecast to rise 2% next year and 21% in the next five years. London’s extended commuter belt is expected to outperform all other regions, with a predicted rise of 24% by 2020.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
UK house prices to grow 6% in 2016 – RICS

UK house prices are forecast to increase by 6% on average in 2016 as the pace of housebuilding lags behind...

Close