Brexit crush­ing Lon­don’s lux­ury hous­ing mar­ket

> High-end prop­erty at prime lo­ca­tions ex­pected to fall by 9% this year, says es­tate agents Sav­ills

The Sun (Malaysia) - - SUNBIZ -

LON­DON: House prices in Lon­don’s prime lo­ca­tions will fall by 9% this year and not grow again un­til 2019 as buy­ers, al­ready hit by in­creased prop­erty taxes, wait to see the out­come of Brexit di­vorce talks, es­tate agents Sav­ills said.

Prices in prime cen­tral Lon­don, which in­cludes the cap­i­tal’s most ex­pen­sive ar­eas in Knights­bridge, Bel­gravia and May­fair, have been fall­ing for two years, ac­cord­ing to Sav­ills, hit by prop­erty tax in­creases on the costli­est prop­er­ties and buy-to-let and sec­ond homes.

But the out­come of the June 23 ref­er­en­dum has fur­ther damp­ened de­mand with some buy­ers bid­ing their time be­fore buy­ing prop­erty and oth­ers bar­gain­ing down prices.

Sav­ills said there would be no re­turn to price growth un­til the talks on pulling Bri­tain out of the EU, ex­pected to start next year, reach a con­clu­sion.

“Two fur­ther years of un­cer­tainty ... are also likely to limit the prospect of any se­ri­ous price growth over that pe­riod,” Sav­ills’ direc­tor of res­i­den­tial re­search Lu­cian Cook said.

Prop­erty was one of the first sec­tors to be hit by the out­come of the Brexit vote with the largest house­builders ini­tially los­ing up to a third of their value and in­vestors pulling cash from com­mer­cial funds.

Sev­eral na­tional house­builders and sur­veys sug­gest de­mand has re­turned, but cen­tral Lon­don, where for­eign in­vestors form a large part of the de­mand, is likely to be most af­fected by the un­cer­tainty over the terms of a Brexit deal.

Prices in cen­tral Lon­don fell at their fastest rate in nearly seven years in Au­gust, ac­cord­ing to con­sul­tancy Knight Frank.

Sav­ills pre­dicted that when prices do rise in 2019 it will be by 8% but the com­pany also said that any de­mand up­turn would de­pend on the level of tax­a­tion go­ing for­ward and the terms of the Brexit deal.

“It prob­a­bly means that Lon­don re­mains an at­trac­tive place to in­vest in prime hous­ing, with a tax en­vi­ron­ment that is not pro­hib­i­tive to those look­ing to ac­quire res­i­den­tial real es­tate,” said Cook. – Reuters

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