Housing prices in London’s wealthiest areas have dropped sharply and are now down 6.7 percent from their 2014 peak, according to the latest research from Savills. And while luxury properties in England’s capital are plummeting in price, suburban towns outside of London are seeing significant price growth.
“Given historic levels of price growth, the increased tax burden and political uncertainty stemming from the pending mayoral election and EU referendum, our view is that we are unlikely to see any price growth over the course of 2016,” Lucian Cook, head of UK residential research at Savills, told the Financial Times.
Glamorous London neighborhoods like Westminster, Kensington and Chelsea have seen a significant drop in the number of transactions since changes to the stamp duty system went into effect during 2014. The Financial Times also reported that an extra three percent surcharge will now be applied to second homes and buy-to-let properties. This further increases costs for many buyers of expensive properties in these areas.
The story is much different outside of the city, however. The Guardian reported that commuter towns including Slough, Luton and Reading situated on the outskirts of London saw significant price growth y-o-y. The latest data from the UK Land Registry noted that Slough saw a 19 percent increase in price growth while Luton recorded a 17 percent increase and Reading had an increase of 14.6 percent. These figures surpassed the annual price growth percentages in London which are running at 13.5 percent, according to The Guardian.
It was noted that domestic buyers were much more likely to purchase property in these locations outside of London. Meanwhile demand from international buyers, including those from Asia, for real estate in prime London locations continues to fluctuate due to volatility in the global economy and could also be another reason behind the falling prices.
