East London residential property prices jumped by seven per cent in the year to March, helping to shore up a slowdown in other parts of the capital hit by uncertainty in the market, new research from JLL today shows.
The property firm's latest central London development report shows a slowdown in sales activity in the first quarter of the year and forecasts that development activity will also continue to slow this year as a result of tough tax rules brought in by the government.
Almost 33,500 residential units were on site in central London at the end of the second half of last year – more than three times the total just four years earlier and 28 per cent ahead of last year.
However JLL said the number of new unit starts the second half was lower than in first, suggesting developers are beginning to slow their rate of delivery.
The number of units seeking planning permission also declined by 27 per cent during the second half of last year compared with the first half, from 25,480 to 18,640.
Sales prices rose by 1.9 per cent across the whole of central London in the year to March 2016. But growth varied hugely between different parts of the capital. In the west end and central west part of London, prices fell by 2.9 per cent and 5.3 per cent respectively, while in east London, around Stratford, prices rose by seven per cent.
Outer core areas grew by 3.9 per cent overall, including 5.6 per cent growth in the south east and 2.3 per cent in the south west.
JLL's head of residential research Adam Challis told City A.M.: "The report clearly shows a weakening in price terms in the prime London market following stamp duty changes, Brexit and a general reticence to get back into the market until after [the EU referendum]".
"But interestingly…east London is still seeing gains that are higher than the falls in the central and west London market, which is a demonstration of where buyers continue to see good value and where we continue to see transactions moving quite well.
"What that means for rest of 2016 and for developers is that those that are moving with the market and adjusting expectation or providing incentives are still seeing good buyer activity. It is a softer market than previous few years but there absolutely is still a keenness in demand as long as developers and sellers are willing to work with the wider grain of the market. But that demand is not feeling the urgency to buy or to overpay."