Against an uncertain political backdrop, there have been some signs of stability for London residential property, according to Knight Frank’s London Residential Review Spring 2017. Transaction volumes in prime London picked up during the final quarter of 2016, albeit from a very low base, and demand has remained relatively healthy through the first quarter of this year.
However, the report states: ‘Asking prices have been revised down as a result of higher rates of stamp duty, a process that has supported more stable levels of activity. In the six months to February 2017, Knight Frank undertook a fifth more transactions in prime central London than the equivalent period last year and 2% more than the same period two years ago. Furthermore, a marginal price rise in February of 0.1% meant the rate of annual price growth eased to -6.6% in prime central London in a sign that price declines may be close to bottoming out. The trend underpins our expectation that growth will be flat in 2017.’
With the UK officially triggering Article 50 on the 29th of March, the wider market backdrop is likely to remain uncertain during the rest of 2017. Knight Frank reports: ‘While the negotiations will merit a lot of media coverage, it should be remembered that Brexit has only had a marginal impact on the prime London property market to date. Stamp duty has been the primary cause of the recent market slowdown and Chancellor Phillip Hammond is the politician who will continue to wield the most influence over the (London property) market.’