Prices in prime central London levelling but growth unlikely for another two years
After double digit falls since 2014, house prices in London’s prime central property market are beginning to find a level but growth is unlikely for another two years, a new analysis shows. While the rate of falls slowed again in the third quarter of 2017, uncertainty over the impact of Brexit points to a two further years of no growth, according to the prime market forecast report from real estate adviser Savills.
Five year growth to the end of 2022 is expected to total 20.2% in central locations while growth in the outer London prime market is expected to be half that over the same time period and less than other regions in the UK. The report points out that when uncertainty clears and central London’s prime residential market again represents identifiably good value, prices will bounce, though not to the same extent as in previous cycles, the firm says.
Five year price growth for the central London prime market means that it will significantly outperforming the wider prime London, market which is more dependent on domestic buyers employed in the financial and business services sector for whom mortgage affordability is more of an issue. Average growth in these markets is projected to total 10.2%. This means that the value gap is beginning to close and for those selling realism in terms of asking price is important and price cutting is already up compared with 2016, the report explains.
Beyond London, the UK’s prime regional markets will continue to follow the pattern of the past three years in showing little price movement. However, while London’s suburbs and extended commuter belt, the markets most dependent on equity flows from the capital, will wait until 2019 or beyond to see price growth, other regional markets are expected to see marginal price rises next year, albeit some remain below their 2007 peak.