Is Brexit the reason for the plunge in Camden’s prime property prices?
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Property prices in Camden have continued to drop, but longer term issues may be at play
New seller asking prices for Camden properties have fallen 3.2 per cent in the past month.
The borough ranked as the second worst performing in London, according to Monday’s Rightmove House Price Index.
The London market overall has bounced back after Brexit, with a rebound of 1.9 per cent, but Camden was one of only eight boroughs to buck the trend.
Miles Shipside, Rightmove director, said: “The boom at the upper end of the London housing market was well and truly curtailed by George Osborne’s punitive stamp duty changes, and prices are re-adjusting to a level at which buyers find better value and are tempted to re-enter.”
Prices have fallen for four consecutive months after Brexit shocks accelerated the slow down implemented by increases made to stamp duty in December 2014 and in April of this year.
Camden is particularly affected due to its high levels of property priced above the £1 million mark.
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Transactions in Camden have fallen by 7 per cent over the past five years according to a new report from Knight Frank.
Tom Bill, head of London residential research at Knight Frank said: “Vendors were already adapting to the new pricing environment and in many cases Brexit became a trigger to make overdue reductions in asking prices.”
Hopes that the weakened pound would encourage a surge in overseas buyers have as yet proved unfounded, with the volatility of sterling over the past few weeks keeping potential investors wary.
Meanwhile report from Savills predicted that prime property prices across London could fall by 9 per cent by the end of 2016 and remain flat for the next two years.
Lucian Cook, director of residetial research at Savills said: “The combination of high levels of stamp duty, a substantially less benign underlying tax environment for overseas owners and general uncertainty following the Brexit vote, indicates that further price adjustments are needed to make the market more fluid in London.”
Whilst prime property is experiencing a decline in prices, properties listed at below £2 million are becoming more desirable due to their lower stamp duty charges.
This has caused a distortion in the market where prime properties are seeing prices fall whilst cheaper properties are going up in price.
Prices rose by 9.9 per cent for Camden properties pitched at under the £2 million mark, according to Knight Frank.
So if you’re trying to sell your home in 2016 you could either be sorely disappointed or pleasantly surprised, depending on whether your property falls into the prime or sub prime bracket.
Meanwhile those looking to buy could finally see the power back in their hands as prices continue to correct.