Prices of prime London residential properties dipped in the first quarter of the year, as uncertainty around the economic outlook and the EU referendum largely offset any investor or second home buyer rush to beat the buy-to-let stamp duty hike deadline.
Values across the whole of prime London slipped by an average of 0.3 per cent in the three months to the end of March, according to research from Savills.
However the property advisory firm said there were big differences in activity between the higher value, discretionary prime central London market and the more domestic and the more needs-based outer prime London locations.
In the most expensive markets of prime central London prices fell by 0.8 per cent in the first quarter. Prices are now 6.7 per cent below their 2014 peak, when George Osborne's Budget announcement of a higher stamp duty rate for £1.5m-plus home hit sentiment in the market.
By contrast, prices in the less expensive and more domestic outer prime London housing markets, were flat in the first quarter, having risen between 2.6 and 4.2 per cent over the past 12 months.
These include areas between Richmond and Wimbledon, through Battersea and Wandsworth in the south and west, and Islington, Wapping and Canary Wharf in the north and east.
Lucian Cook, Savills head of UK residential research said: “Unlike other parts of the London housing market, the prime markets remain fairly price sensitive and increasingly dominated by needs based buyers.”
“The recent Budget statement confirmed that the stamp duty take for the top end of the market has risen following the reforms of December 2014, despite lower transactional activity, effectively signalling that this policy is here to stay and will continue to influence buying and selling decisions and assessment of value."
“Given historic levels of price growth, the increased tax burden and political uncertainty stemming from the pending mayoral election and EU referendum, our view is that we are unlikely see any price growth over the course of 2016 as the market continues its adjustment.”