Transactions in prime central London have plummeted and prices per square foot have dipped.
Data from LonRes shows that in the second quarter of this year transactions across prime London are down 22.7 per cent on the same period last year and that prices on a £-per-square-foot basis are down 0.9 per cent.
The period under review was, of course, including the final five weeks of the general election campaign, when the possibility of a mansion tax existed. For this reason, the properties in the £1m to £2m band were particularly badly hit.
However, William Carrington - LonRes chairman - says the stamp duty changes introduced at the end of 2014 are the main cause of the market hiatus.
“For many people living in London the cost of moving has become prohibitively high with the consequence that would-be sellers are choosing to stay put. This, in turn is putting pressure on supply at a time when the market copes with a decline in transactions - currently over 20 per cent year-on-year” he says.
LonRes says agents have reported falling levels of applicants over the second quarter of 2015, with demand from overseas buyers weakening - with the exceptions of the Middle East and Asia.
In contrast 40 per cent of agents have seen an increase in demand from UK purchasers over the past three months compared to just 14 per cent who have seen a fall. At the same time, there has also been a rise in purchases for owner-occupation compared to the spring months, with a fall in the proportion of sales to investors.
Carrington says the hope was the a business-friendly Conservative government would give momentum to the market - however “the pre and post-election hype had no bounce.”
He says London’s market now faces more uncertainty caused by David Cameron’s promised in/out referendum on Europe and nervousness about whether the Greek problems over the Euro “will spread as a contagion.”