Stamp duty change and Brexit result in falling prices in prime central London

Taylor Scott International News

Prime central London property prices fell again in the first quarter of 2016 but transaction levels increased marginally, according to the latest index to be published. Overall the market was notably quieter during due to a combination of the uncertainty surrounding the European Union referendum and a slowdown following a boost in the first quarter ahead of stamp duty changes in April. The market has also been influenced by higher stamp duty for high value properties, according to the report from real estate firm JLL which adds that potential buyers adopted a wait and see attitude ahead of the referendum vote. Since the vote to leave the EU, and the subsequent weakening of sterling, several international buyers have been more active although a good deal of uncertainty remains, especially in terms of the medium term outlook, the report says. However, the fact that the vote is now in the past also seems to have encouraged a few more domestic buyers back into the market. The number of properties on the market has increased again during the second quarter as vendors fail to sell or elect not to sell at prices unacceptable to them. This additional choice and bargaining power for purchasers is contributing to both the scale of price falls and the slowdown in transactions. ‘Given recent uncertainty it is unsurprising that prices have weakened again. On average prices have fallen by 3.3% in the year to quarter two, but they have also declined in every quarter since the first quarter of 2015 as a variety of influences have impacted on confidence and switched the balance of power in favour of buyers,’ said Neil Chegwidden, residential research director at JLL. The data also shows that prices slipped by 0.9% in the second quarter of 2016 having fallen by 1.1% in the first quarter and price falls over the past year have been greater for higher value properties although large lateral flats continue to hold their value better than other large apartments or houses. On average prices have declined by 6% over the 18 months to the second quarter of 2016 with higher value property prices down by an average 10% and prices have fallen across all price ranges during quarter two and over the last year. The sub £2 million market continues to be the most resilient. However, prices have fallen in each quarter since the first quarter of 2015. On average prices in the sub £2 million bracket have fallen by 2.6% over the 12 months. Meanwhile, prices in the £2 million to £5 million market have been declining for 18 months now, with prices down 2.9% during the year to the second quarter. Prices in the £5 million to £10 million price bracket and the £10 million plus market have been impacted most notably by the stamp duty changes. Prices have dropped by 4.4% in the year to quarter two in the £5 million to… Taylor Scott International

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