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Prime central London price growth falls as stamp duty change effect persists

Prime central London price growth falls as stamp duty change effect persists

Annual price growth in the prime central London property market fell to 1.3% in September, the lowest rate since October 2009, the latest data to be published shows.

Annual price declines were in excess of 3% in some markets in the west of the city as higher stamp duty introduced towards the end of last year is still having an effect, according to a new analysis report from Knight Frank.

Month on month prices fell by 0.1% and an east/west divide around Hyde Park has emerged.
The firm’s data also shows that new prospective buyers declined by 34% but viewings only fell by 4%. However, sales volumes in September rose from August and were on track to match September 2014.

Rising transaction costs appear to have sparked a flight to quality, according to Tom Bill, head of London residential research at Knight Frank. ‘Activity has certainly increased following a subdued summer period as buyers came to terms with an increase in stamp duty and a July Budget that curbed exemptions surrounding resident non-doms,’ he said.

‘Furthermore, some high quality stock has come onto the market, which has driven demand. However, rising supply is not uniform across prime central London and there is not yet clear evidence that new demand will keep pace with any supply increase,’ he explained.

He believes that part of the reason why new applicant levels are down is a growing trend among buyers to find the right property on the internet before registering. ‘Underlying demand remains strong but buyers have become more circumspect and stringent in their requirements due to the stamp duty increase. Demand is particularly strong for properties in the best condition and on a prime floor, street or square,’ said Bill.

‘So, while the anticipated gear change materialised as summer moved into autumn, there was no sense the market is entering full-blown recovery mode after what has been a subdued 2015,’ he added.

 

Source: http://www.propertywire.com/news/europe/uk-london-prime-property-2015100511054.html

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