Price falls in prime central London may have bottomed out – but there is still no bounce in sight, Savills has said.
Its head of residential research, Lucian Cook, said: “This broad price correction across prime central London is comparable with falls seen after the global financial crisis and in the downturns of the early 80s and early 90s, suggesting the market is now close to a full re-pricing.”
While small and very expensive, the prime central London sector is regarded by some as an irrelevance and by others as comparable to the canary in the coal mine as being predictive for the rest of the UK.
According to Savills, values in prime central London have fallen over 20% since their peak in 2014, and are 13.6% below the pre-referendum level.
The falls are, however, good for those buying in US dollars, who now have an effective price discount of 42% thanks both to the reductions and the value of sterling.
Savills said it nevertheless expects buyer caution to prevail throughout the rest of this year, given the likelihood of ongoing negotiations over Brexit and the possibility of a general election.
Cook said: “However, we don’t envisage further significant price falls over this period, given the extent to which values have already adjusted and the size of swing in voting intentions required for there to be a hard left majority government and associated shift in policy environment.”
Comments (3)
The evidence for this “bottoming our” is that prices have fallen broadly the same as in other corrections? Sorry, that isn’t evidence of anything. It is just an observation. This bear market will “bottom out” when prices stop falling. And at the moment they still are, and on an my realistic measure are still very overvalued.
I remember being advised by Savills 18 months ago that prime central London price falls had “bottomed out”. And, by the same measure, it is naive or disingenuous to dismiss the likelihood of a hard left majority government in the UK.
Says Savills