Estate agent predicts a fall in London house prices

October 12, 2016 by Brendan O'Neill

House Prices

According to a leading estate agent, “prime” central London properties are likely to lose hundreds of thousands of pounds in value by the end of the year.

Prime property in London is defined by Savills as those which have an average price of £4 million, in areas including Belgravia, Knightsbridge and Mayfair. The estate agent stated that uncertainty surrounding Brexit and the stamp duty changes had been factors which had impacted on the prime property market.

Savills believes that central property prices are likely to fall by 9%, which is in addition to 3.3% reduction registered last year, meaning that a property valued at £4 million would lose £360,000. Savills further predicted that growth would remain at 0% for these homes, remaining static during 2017 and 2018, but bouncing back once the Brexit negotiations had been completed.

The UK head of residential research for Savills, Lucian Cook, stated that sellers at the top end of the property market had reduced their prices by 5-10%. Cook added that the current situation was similar to a period between 2002 and 2004, when prices fell by 10%.

Despite the predictions, Savills said that they were expecting prices to spring back in 2019, while it expected growth between 2017 and 2021 to equate to 21%.

Lower value London property, around £2 million, is forecast to fall by 5%, with a further fall in value of 1% in 2017. To minimise the impact of a fall in property value, sellers may benefit from advice from a CeMAP qualified adviser.