The demand for homes in the capital remained robust during Q1 2015, according to Chestertons’ London Prime Residential Report for spring 2015.
Demand is still outstripping supply, the agency says, and a ‘drip-feed’ of new homes and further tightening of lending criteria may hold back the resurgent residential market.
Nick Barnes, head of research as Chestertons, says that political uncertainty caused a subdued six months for the high-end agency.
“Fears of a Mansion Tax, which could have wiped up to a quarter of a million pounds off the value of properties in the £2m-plus bracket had it been introduced, clearly having an impact on buyers in prime London markets,” he says.
The election of a majority government has calmed any fears over the future of the property market, says Barnes, and since the election, the firm has recorded a 15% increase in enquiries.
Barnes believes that the first major challenge is to revitalise the supply of good quality homes into both the sales and lettings markets.
“Politicians at the national and local level must step up to deliver more land for development, while finding new ways to incentivise house builders and easing the planning regulatory burden to get more homes into the system,” he says.
“While it's a relief new wealth taxes and some of the more hands-on policies aimed at reforming the rental market are off the table, the problem remains of how we boost housing supply significantly and for the long term. Only if by safeguarding the supply of new homes can we ensure Londoners are able to invest in their futures by buying their own home,” adds Chestertons’ group CEO, Robert Bartlett.