Sandfords give their predictions for the London 2016 property market.
Latest official data show that property market growth has continued to cool and regions, particularly London, has been far slower compared to last year. Sandfords, a Central and North West London agent, reports that the slowdown followed the reforms of stamp duty in the Autumn Statement last December.
Andrew Ellinas, Director at Sandfords, says: “The stamp duty changes that took place towards the end of 2014 have depressed the market across the board in prime Central London (PCL) and forecasts for next year have altered in light of this. I predict that price increases in the Prime Central London market in 2016 will be modest with some areas experiencing growth and others seeing prices remaining fairly static.
We have seen many potential vendors choosing to stay put and spend the money that would have been expended as stamp duty on a purchase in refurbishing or extending their present home. This is currently particularly evident with family properties, and something we should expect to see moving into the New Year. The biggest price band that has been affected is from £1.5m to £5m. For properties below the £1.5m mark the changes are not too onerous. For anything above £5m, purchasers have sufficient funds and are therefore not too bothered about a heavy stamp duty bill.
Unless something significant happens that we cannot foresee at the moment, there will not be a crash, but the global economic outlook combined with tax changes in the UK and the perceived high current values will subdue demand and this will take some time to work through. I do not anticipate sustainable growth returning until the 3rd quarter of 2016.
Regent’s Park and Marylebone are still undervalued in comparison to Knightsbridge and Kensington, but are becoming increasingly more fashionable and desirable. Other areas of growth will be in Fitzrovia and Kings Cross which are rapidly changing out of all recognition.
The capital is undoubtedly still one of the safest places in the world to live and invest, and will continue to be a top investment location. This year, buyers from all over the world including, the Far East, China, India, Greece and Europe have been heavily spending their money and buying properties in London, and it looks like they will still be big players in 2016.”
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