Prices for luxury properties in London will increase by 10.4% by 2021

Prices for luxury properties in London continue to be mitigated in 2017, but in 2018, likely will be a period of growth. According to the real estate Agency Cluttons, Prime Central London will grow in value by 10.4% by 2021.

Still, the main problem of the London property market is affordability. The rampant growth of property prices in London shattered the dream of many people in their own home. Now the Bank of England continues to maintain the base rate at historically low levels and, despite this, prices for luxury housing are softened. The main reason for the decline in prices, analysts say the high tax burden, which is particularly sensitive in the upper sector of the market.

The most expensive and inaccessible area of London and generally the UK remains Kensington and Chelsea. The cost of housing here corresponds to about 50 of the annual salaries of its residents.

Meanwhile, the expected increase in the base rate by 25 basis points in the second quarter of 2018 and to 1% by the end of 2019. At the other end of the scale is the most affordable area of London – Barking and Dagenham . For the people living in it, housing will cost about 12 annual salaries.

In some areas of Central London has already seen price increase after the main drop recorded in 2016. In the second quarter of 2017, prices in South Kensington have grown by 2.1%, in Chelsea by 2.4%, in Knightsbridge by 1.3% , after falling last year by 10.4%, 10% and 11%, respectively.

Average prices of luxury property in London is still falling but the pace of decline is slowing. If in the 1st quarter of 2017, prices fell by 0.8% in the second quarter of 2017 price drop was 0.5%.

Despite the negotiations linked with the Brexit, which, of course, affected the investor sentiments, London continues as a magnet to attract foreign investors. As soon as the negotiation process will emerge a clear economic picture of the future of the UK, investors ‘ anxiety will subside and, according to forecasts from Cluttons , we will see price growth for elite real estate in London by 2.8% by the end of 2018 and 10.4% in the next 5 years to 2021.

® Helen Entree. 04.09.2017 G.

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