London property prices face 5% fall in 2015

London property prices face 5% fall in 2015

London property prices face 5% fall in 2015 - Credit: PA Wire/Press Association Images

Prime London house prices could fall as much as five percent in 2015 following December’s Stamp Duty changes according to estate agents surveyed by the Royal Institute of Chartered Surveyors.

London recorded its fourth consecutive negative price balance in December, as well as a fall in both new buyer enquiries and new vendor instructions.

The combination of low supply and demand have contributed to muted sales levels and more stable pricing, while the agents surveyed predicted a fall in sales of between 5 and 10 pc for the next year.

Those surveyed also predicted prices between 2 and 5 pc lower than they would be without the impact of the new Stamp Duty rules.

While agents across the country (and those working in less pricey London boroughs) had seen the market boosted by the changes to the system, which offered significant reductions to those spending less than £937,000, larger properties, and those in more prime areas were expecting a negative impact.

Amit Batra managing director of Lexingtons in Belsize Park said: “London is going to be the largest area affected by the new Stamp Duty changes. In some of the good parts of London, the threshold for seeing a benefit will get you a two-bedroom flat.

“Every year when there’s an election, the whole property market slows down. As soon as the results are out, regardless of who the winner is, it’s back to business again.”

Property search engine Zoopla reported last month that the number of properties in London that had reduced their prices doubled between February and December, while eMoov found that demand for property in Westminster dropped 42 pc in the same period.

This was partly a result of the traditional winter slowdown, but was also attributed to a new need for realism in pricing among vendors as Halifax reported that lack of affordability was causing demand to drop.