House values in London’s wealthiest residential districts fell by an average 6.7% in the 12 months to January, largely driven by Brexit and stamp duty hikes.
The Bayswater area saw the highest price falls, with a 14% decrease, while prices in Chelsea and Kensington were down by 13.3% and 11.9% respectively.
Vendors have realised the need for reducing asking prices as uncertainty took hold in the wake of the EU referendum, while stamp duty increases also impacted buyers.
According to LonRes, the gap between the asking price and the achieved price grew by 10% in 2016.
However, these price reductions are encouraging buyers back to the prime London market, with sales transactions increasing in the final quarter of last year.
LonRes reports that prime London house prices peaked in November 2014, but fell to a 22-month low in September 2016. As prices dropped, the number of sales transactions started to rise.
Property price discounts have made parts of prime central London more accessible to buyers who might not otherwise have been able to afford prime residential London prices.
Stamp duty increases have affected the top end of the market. The extra cost of paying higher stamp duty on a property in London’s priciest residential areas led many buyers to look to more affordable parts of the capital.
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