London house price growth set to outstrip rest of UK for years

Ben Southwood
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<a href="/house-prices">London house price</a> growth will be well ahead of the UK average for at least the next five years, estate agent Savills predicted yesterday.

Central London housing will get 25.6 per cent more expensive over the five years to the end of 2017, the estate agent said, compared to 10.2 per cent growth in the Midlands, Wales and the North, and just 9.2 per cent expansion in Scotland.

Prime central London has already seen prices boom 53 per cent since the bottom of the trough inflicted by the credit crunch – which came in the first quarter of 2009 – and the ultra-prime sector has boomed some 58.4 per cent in that time, it said.

But Savills predicts completely flat average house prices in central London over next year, as government tax hikes spoil the appetites of so far insatiable international buyers.

“After such strong growth, we now expect prices to plateau in 2013. Increased taxation, including the stamp duty levy, strengthening sterling and a weakened global economic outlook could all provide catalysts for a slowdown,” said Yolande Barnes at Savills. “But the fundamentals in London remain strong so we expect that growth will resume in 2014.”

This growth will be spread across the London metropolitan area, Savills believes.

It predicts that even areas that are part of the “outer commute” will see prices up 19.2 per cent by 2017.