The most attractive areas of London is Canary Wharf , the City, Wapping and Islington

Prices of luxury property in London fell slightly in the first quarter of 2015. The company elite property London Savills has provided his analysis on the study of this market.

Falling prices in Prime Central London began in late 2014 and was predictable at the beginning of 2015. The concerns of customers, raised Stamp duty and fears that the results of the parliamentary elections in may 2015 will be the introduction of a “mansion Tax” , is reflected in the market and the demand for luxury housing fell significantly.

Meanwhile, as indicated in the report, the pace of falling prices has slowed considerably. If in the 4th quarter of 2014, prices fell by 2.6% in the first quarter of 2015 the growth of prices amounted to 0.5%.

Moreover, according to Savills, prices for Prime property in London will grow by approximately 23% in the next 5 years, if the tax burden on this type of property will not increase. The real estate market and so have already received the maximum tax burden from the change of the scale of Stamp duty, which took place in December 2014.

The opposite picture in the markets of North and East London. Property prices in the districts of Islington, Wapping and Canary Wharf continues to grow, demonstrating the fact that investors are attracted to the price and quality of housing in these areas. In addition, of course the driver of price growth in these areas is the proximity to the largest world financial centres of London City and Canary Wharf, where there is greater financial, advertising, telecommunications sectors. Employees of the companies in these sectors prefer to buy quality housing near work, taking advantage of historically low rates on mortgages and the programme “Help to buy”. Housing prices in these areas, though slowed down for the last 6 months, but still on an annual basis showed growth of 2.6%.

The December changes inthe application of Stamp duty was the result of a 5-year price growth for elite real estate of London, in which prices rose more than 30%.

Higher rates of Stamp duty have become so “cold shower” that the government has sent the market shooting down of strong price growth. Now sellers of real estate class “Luxury” in Central London have become more sensible to the formation of prices on their homes, and many of them go for a price adjustment in the amount that will compensate buyer loss from Stamp tax.

However, despite the upcoming election, real estate in London worth up to £2 million continues to enjoy good demand, as it does not risk to fall under the “mansion tax”.

In General, the market is flooded with mood of “cautious optimism” . Savills staff hope that after the election there will come a time “tax certainty” and both sellers and buyers will be active in the market.

® Helen G. Antre 23.03.2015

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