Prime central London looks poised to welcome property price increases of 18% over the next five years, according to a report Monday from Knight Frank.
The estate agency and property consultant predicts that the growth will begin modestly, “as the threat of a no-deal Brexit persists, combined with the possibility of stamp duty changes, the erosion of the Sterling discount and the normalization of interest rates,” Tom Bill, head of London residential research, wrote in the report.
Price growth is then expected to pick up, peaking in 2023 at 5%, before moderating in 2024 at 4%, the year of the next election. Increasing numbers of inventory and sales are both likely to support the rises. There were 18% more transactions in the first 11 months of 2019 in prime central London than the same time frame in 2015, as buyers responded to the repricing that has taken place in the city.
And though the number of £1 million-plus (US$1.29 million-plus) listings in prime central London in November was 17% lower than it was at the same time last year, sellers are likely to return to the market in the face of increased political certainty following this month’s election.
The predicted increases mark a positive change from the 3.1% annual property price declines logged in prime central London in November. But despite the short-term value slump, London still reigns supreme in the 10-year property price gain rankings.
London property prices surged 74% over the decade, an average increase of £204,400 per home, more than any other major U.K. city, according to a separate report Monday from Zoopla.
The lion’s share of that value surge came before 2016, when tax changes and the EU referendum dragged down sentiment, prices and transactions in the city.
(Source: Mansion Global)