Central London’s waning high-end property market could be set for a resurgence over the next five years, with a new report forecasting that prime house prices could rocket by more than 15 per cent if an expected bounce in confidence returns to the capital.
Despite stamp duty changes and political volatility causing a slowdown in demand for many of London’s most expensive properties in the last four years, figures today project a swift return to growth next year if Britain signs a trade deal with the EU.
Prime Central London price growth will rise to one per cent in 2019 and 2.5 per cent in 2020, before rising to four per cent in 202, according to real estate giant JLL’s latest residential report.
JLL, which is predicting a 90 per cent probability of a Brexit deal being negotiated, said greater certainty from a deal with Brussels would immediately boost demand from domestic and international buyers – the latter particularly keen to benefit from the short-term currency advantage.
“The expected upswing in the market over the next five years is predicted amidst a difficult era where uncertainty surrounding Brexit has dented consumer confidence, casting a shadow over personal finances and negatively impacting the UK housing market,” according to Adam Challis, head of UK residential research at JLL.
Fresh evidence of weaker growth in London’s prime housing market has been emerging within the last 12 months, with agents and experts reporting subdued activity since 2014.
According to Hometrack research out today, the borough of Kensington and Chelsea, which is home to some of the world’s most expensive residential property, saw the biggest UK price fall of 4.9 per cent to an average £1.17m over the past year.
Trevor Abrahmsohn, a luxury property agent in North West London, recently told City A.M. that he had seen transactions crash by 70 per cent since George Osborne introduced stamp duty four years ago.
Today's report also projected overall house prices across the UK are set to grow by 11.4 per cent in the next five years, with London expected to see sharper growth on a post-Brexit deal than any other region in the UK.