Bag a bargain: Here's how much high-end London house prices fell last year

Emma Haslett
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Homes in high-end areas like Chelsea are falling in value (Source: Getty)

Got a couple of million going spare? You could bag a bargain in the capital, after new research suggested top-end house prices fell 6.9 per cent year-on-year in the final quarter of 2016.

Research by Savills suggested house prices in so-called prime central London, high-end areas including Mayfair, Belgravia and Chelsea, fell 2.2 per cent during the fourth quarter.

That means house prices in some of London's most elite areas are now 12.5 per cent below their 2014 peak.

Read more: These will be London's property hot spots in 2017

Not surprisingly, the fall has been driven by what Savills called "shock" increases to stamp duty in December 2014, which targeted high-end homes in particular.

That pushed down transactions of properties worth £1m plus by 21 per cent in 2016, according to data from Lonres. In the three months to the end of July, transaction volumes were about half that of the same period in 2015 - although they rose a little in the final quarter, to hover 16 per cent below last year's figure.

Savills added that between January and the end of November, sales right at the very top of the market were hit hard. Some 320 homes worth more than £5m in the capital were sold between January and the end of November.

Those transactions were worth £3.7bn in total - 17 per cent lower than the same period in 2015. However, one industry body has predicted that house prices will stop falling in the capital next year.

“Sellers increasingly understand the need to factor in both the additional stamp duty and economic uncertainty to their price expectations in order to attract still very cautious buyers, ” said Lucian Cook, Savills UK head of residential research.

“We saw a real dearth of transactions over the late spring and summer months following the race to beat the new three per cent surcharge. But further price adjustments, coupled with the currency play for international buyers, appear to have triggered greater buyer commitment and prime London sales volumes picked up significantly in September, October and November before easing back in December.”

At the end of last month figures from Your Move showed average rental prices hit a record high in November, despite falling house prices.

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