Prices for luxury properties in London will increase by 22% in the next 4 years, but not more than 3% this year

The growth of prices for luxury properties in Central London was 2.8% in April 2015 over the past 12 months. This is the lowest annual growth since November 2009 and likely this figure is unlikely to change this year. These conclusions led the new study of real estate market of the London from Knight Frank. The downward trajectory in prices was observed for several months ahead of the General elections. The victory of the Conservative Party, most likely provided the lowest point of the market decline in April and now the luxury real estate market of London will start a new upward cycle.

Tom bill, head of market research residential real estate company Knight Frank emphasizes that the main effect of the victory of the Conservatives was that the prospect of introducing a “mansion tax” more than £2 million was postponed indefinitely.

Of course, the number of transactions in the market of elite housing will be increased. However, the prospects of the luxury real estate market of London is dependent on how society will diminish public outcry against expensive real estate caused by the labour party.

The stagnation in the market caused by the election uncertainty is resolved, however many sellers , encouraged by the revival of the market, will dramatically raise prices, which in turn will create a psychological barrier for buyers. The market is rebuilt to new conditions. On the first Monday after the election , may 11, in sale many new objects but the number of potential buyers Hegira their risks, has concluded lease contracts before the election, thereby postponing their purchases for a short time.

Most likely, the real estate market will face in the first stage with a slight delay , caused by the gap between asking prices and buyers ‘ expectations. But overall, there is every reason to believe that the market of elite housing in Central London will return to growth. Especially in areas where the supply of new housing units behind demand. In particular, this will affect Kensington and Chelsea where price growth over the past year was the weakest in comparison with other areas.

Despite the elections, we should not delude ourselves that the market is not facing any risks. The conservative party, in the framework of the fight against illegal migration, to tighten terms for foreign buyers, or again to revise the scale of Stamp duty. Thus, the company Knitgh Frank predicts modest price growth at 3% in the market of elite housing in Central London.

® Maxim Savitsky. 25.05.2015 year.

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