Wednesday 9 September 2015 10:46 am

The cost of luxury homes in Nine Elms are being slashed to bargain prices

Nine Elms may be one of London's most ambitious residential development projects in decades – but it seems the luxury homes being built in the area aren't as popular as anticipated, after figures showed half of the homes under construction or just completed the area were reduced in price before they were sold

The research, by real estate data provider Lonres, showed a third of new homes in SW8, Nine Elm's postcode, had been on the market for more than a year, compared with just 12 per cent of properties in "Prime" London, the name given to the capital's most exclusive areas. 

Read more: Wealthy foreign students are forking out for luxury flats in London

Meanwhile, just 17 per cent of SW8 new builds sold at or above their initial asking price. 

Once it's completed, Nine Elms – which includes Battersea Power Station – will provide 18,000 new homes, as well as millions of square feet of office space (including the new American embassy), a new retail district and even a "linear" park, inspired by New York's High Line.

But the developers flocking to the area – who include new FTSE 100 admission Berkeley Group, as well as Ballymore and a consortium of Malaysian developers at Battersea Power Station – have been fiercely criticised for focusing on luxury apartments.

The news came just days after Knight Frank's Prime Central London index, which tracks sales of homes in the capital's most exclusive areas, found house price growth fell to its lowest in more than five years during August.

Could the slow sales at Nine Elms be down to weakness in the Chinese economy? Asian investors are seen as more receptive to the idea of buying off-plan – which led to scores of developers taking their schemes on "roadshows" in China in recent years. But the devaluation in its currency has caused turmoil in the markets, suggesting buyers are likely to be more cautious.

"China's currency devaluation… has caused some buyers to postpone decision-making until there is a greater sense of certainty," admitted Tom Bill, Knight Frank's head of London residential research.
But he added that uncertainty for Chinese buyers at home might be good for UK developers.
"There is evidence Chinese buyers have stepped up their interest in ‘safe haven’ global property markets like London and are increasingly looking for homes in ‘golden postcode’ neighbourhoods like Mayfair."
Whether that translates to an uptick in sales at Nine Elms, though, is another question.