‘London luxury property prices will stay flat until after Brexit’

Prices for luxury homes in central London are forecast to fall 4% this year and will flatline for nearly two more years as Brexit uncertainty and tax changes weigh on the market, according to Savills.

The upmarket estate agent is predicting that prices will start to recover towards the end of 2019, rising by 2%, with a stronger bounceback of 8% in 2020. The recovery will take a year longer than the firm previously expected. It blamed heightened political uncertainty, with the “complexity of Brexit becoming much more apparent”.

Lucian Cook, the head of UK residential research at Savills, said: “Uncertainty fuelled by Brexit and a weakened government mandate since the June election means sentiment is fragile.”

Prices in central London have fallen by 3.2% in the first nine months of this year, and are 15.2% below their peak three years ago. Sellers are being forced to lower their prices: the number of properties worth £1m or more where the asking price has been cut nearly doubled in the first half of 2017 from a year ago.

Savills is forecasting 20% growth in central London luxury house prices over the next five years, which is less than half the 52% long-term average seen between 1979 and 2014.

In 2014, the Daily Mail reported that wealthy Africans were spending almost £4m on London property every week, adding that Nigerians forked out £250m on London homes between 2011 and 2014.