House prices in London to fall this year for the first time since 2009 as stamp duty hits property prices

 
Emma Haslett
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Homes at the top end of the London market are less popular, after a raft of changes introduced during the Autumn Statement (Source: Getty)

House price growth in the whole of the UK is about to outstrip London for the first time since 2009, a think tank reckons, after stamp duty and the mansion tax combined to scare buyers.

Research published by the Centre for Economic and Business Research (CEBR) today suggests house prices in the capital will actually fall by 3.6 per cent in 2015, the first time they've dropped since 2009. By contrast, the UK as a whole will experience growth of 1.5 per cent.

Much has been made of the stratospheric growth of London house prices in recent years - indeed, the CEBR reckons they rose 17.4 per cent last year, in comparison to the UK's rise of 10 per cent.

But it seems those who regarded the capital's property market as a "safe haven" for their cash - many of whom were rich foreigners - may be deterred, after the chancellor introduced "hefty new" stamp duty charges during his Autumn Statement. Not to mention the mansion tax, which threatens to become a reality for homes worth more than £2m if the Labour party wins a majority at the election.

Meanwhile, rising incomes across the rest of the country mean demand across the rest of the UK is likely to increase.

As Nina Skero, the report's main author, pointed out: "After a few months when the market appeared to be coming off the boil, December’s stamp duty changes, as well as rising household incomes, are lifting prices in many parts of the UK."

“In London, however, [a decline in prices will be] driven by a significant weakening at the prime end of the market. A potential mansion tax, reduced overseas interest and hefty new stamp duty rates have hit demand for high value property.”

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