Prices dip in prime outer London as election cools demand

Taylor Scott International News

Prices in prime outer London fell in October, ending a period of 40 consecutive months of growth, according to the latest report from Knight Frank. A decrease of 0.2% was the first fall since May 2011, which meant annual growth slowed to 10.1% from 11.8% in September. Despite the fact annual growth eased, it exceeded the figure of 8.4% in October last year. Knight Frank forecasts growth in prime outer London will slow to 3% in 2015, predominantly due to the possibility of a mansion tax after the general election in May next year, though we expect cumulative growth of 26% between 2015 and 2019 as demand continues to exceed supply. Doubt also surrounds the timing of an interest rate rise even though weak wage growth and low inflation means the likelihood of a near term increase has receded. ‘The combination of this uncertainty and the fact prices have risen strongly over a prolonged period of time means annual growth will unavoidably slow, which it has been doing since the summer,’ said Tom Bill, He pointed out that in many cases, more realistic asking prices have re-awakened the interest of buyers. The most marked decrease was in Fulham where prices fell 1.1% in October. The area has a high number of houses worth between £2 million and £4 million, which could potentially be liable for mansion tax. Meanwhile, there was growth in east London, with prices increasing by 0.4% in Wapping and 0.1% in Canary Wharf in October, the only two Knight Frank offices in prime outer London to record a rise. Bill explained that both areas benefit from their relative proximity to London’s two financial centres of the City and Canary Wharf, the fact they have fewer £2 million plus properties and the emergence of high quality new build schemes in east London that lifts prices in the re-sales market. Rental values fell 0.1% in October and the annual decline was 0.9%. Despite the decrease, demand rose in the third quarter of 2014, which meant quarterly growth remained positive, as figure two shows. Meanwhile, yields jumped by the most in over three years to 3.59%, their highest level in seven months. The Knight Frank Prime Outer London Index, established in 1997, is the longest running and most comprehensive index covering the prime outer London residential marketplace. The index is based on a repeat valuation methodology that tracks capital values of prime outer London residential property. Continue reading →

The post Prices dip in prime outer London as election cools demand appeared first on Taylor Scott International.

Taylor Scott International

Taylor Scott International, Taylor Scott

Comments are closed.