Transactions in prime central London have dropped nine per cent in the year to the end of August according to Knight Frank - and it says the fall “highlights how uncertainty surrounding the final stages of Brexit talks are having an impact on the market.”
The agency says that in a similar fashion to sales volumes, pricing has weakened in recent months as uncertainty around the UK’s exit from the EU continues.
“This trend has been exacerbated by a growth in supply as more landlords attempt to sell their property following tax changes” according to Knight Frank’s London research chief, Tom Bill.
However, the agency says that despite the sales and prices issues, underlying demand has continued to increase - the number of new prospective buyers in prime central and prime outer London grew 31 per cent between January 2016 and August this year, the agency notes.
“Meanwhile, in a sign that pent- up demand is forming, the total number of prospective buyers was 11 per cent higher in August in prime central London than the same month last year. The equivalent rise was six per cent in prime outer London” says Bill.
He adds that the Brexit uncertainties may be “a short-term trend that may reverse once the outcome is determined.”
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Nothing to do with the ludicrous overvaluation of the market then? It would be nice, just once, for an agency to admint that the reason no one is buying and prices are buying is because property is overvalued. Not Stamp Duty, not Brexit, not AMLs checks, just people realising that prices were much too high, have been falling for a while but have a way to go until they bottom out.
I lay the blame fair and square at the government's feet for the stall in the Prime Central London property market. The open market was fine until they interfered and shot themselves in the foot. London is the financial engine of the rest of the country and when it is starved of oil, it stalls, which in turn then has the obvious knock on effect across the rest of the country. The tax hikes have made the city a far less attractive place to invest, allowing foreign investors to look elsewhere for better returns. The market is a self valuing living breathing animal that will always adjust accordingly, so I have to disagree with Mr Walsh above as to the "overvaluation of the market".
The bigger picture across what is now a small world, is that London "was" a competitively priced and favourable place to live with a relatively low corruption rate and fairly stable government. Foreign investment was and still is a crucial part of the UK's economy, and the xenophobic attack on that source has proved to be a savage own goal. With transactions down by as much as 75% and associated losses (20% VAT on every facet of those transactions) far outstrip the tax revenue now garnered by the Inland Revenue. There is of course the subject of certain vendors being slow to react to the price adjustment and all of those I know are foreign!
Mr Walsh, you criticise anything to do with property. What do you do for a living? Are you a comrade of Jeremy Corbyn? Markets will sort them selves out and have periods of adjustment, but this adjustment has had a huge help from the Gov't in the form of GEORGE OSBOURNS ludicrous SDLT increases. Just what we need as we Brexit, i don't think!!
London. London. London.
Fed up listening to you guys.
We don't hear anything from you when the going is good.
As the old song goes.
When the going gets tough the tough get going.
Sounds like a rather chippy parochial comment that is neither educated nor constructive.
Knight Frank should know better, Stamp Duty has cut the top off the market, bleating about Brexit will not change the fact that the Top End market will not wear taxes at this level and the buyers have demonstrated that they are not willing to pay them. Moron Osbourne should have known that but I suppose his forecasting skills match his ability to run a free newspaper!!
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