Brexit to blame: prime north London property down 6 per cent annually
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Prices had been showing signs of recovering after stamp duty reform until Brexit, but Hampstead and Highgate still prove the best long term investment
Brexit has set back prime property price recovery, according to the latest analysis from Savills.
Property valued at upwards of £1.5 million had suffered following the introduction of the new stamp duty rules, but looked set to be on the road to recovery.
“Ahead of the vote to leave the EU, there were signs of a market bottoming following the adjustment triggered by the December 2014 stamp duty reform, and some locations had started to show price growth, but increased political and economic uncertainty has weakened fragile buyer sentiment,” said Lucian Cook, head of residential research at Savills.
Property prices in prime north and north west London, which covers Hampstead, Highgate and Hampstead Garden Suburb, fell 6 per cent annually.
This was the biggest fall of any area bar prime central, where prices fell 6.8 per cent.
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Prices are down 3.9 per cent from their peak in 2014.
Slowing sales and stalling prices have meant that those hoping to sell their house have had to price conservatively or risk seeing their property languish on the market.
“Where vendors have realistic price expectations, which reflect these falls, sales are proceeding,” said Mr Cook.
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“But there is a lack of urgency in the market and vendors who need to sell may need to adjust their expectations further.”
Some industry experts had predicted a Brexit bounce following the vote to leave the European Union, where a weak pound would encourage a raft of international buyers to swoop in and buy up properties at relatively bargain prices.
“In our experience, the currency play is helping to underpin sales, by partially offsetting high stamp duty costs, but buyers still need the reassurance that they are buying the right property at the right price,” said Mr Cook.
With stamp duty making purchasing property in the upper price brackets prohibitively expensive, speculative buyers have become a rarity.
Now the market is dominated by those buying out of necessity.
Despite stamp duty stalling and Brexit blues property in Hampstead and Highgate still represents an excellent investment in the long term.
Prices have risen 36.1 per cent over the past ten years, the largest clime of all areas of prime London.
Mr Cook said: “Prime London continues to be considered a relatively secure investment asset in a global context and this too is underpinning buying decisions for those taking a mid to long term view.”