Knight Frank is the latest estate agent to admit that the prime London sales market is “subdued” - and it blames the government and international stock market jitters.
The agency joins W A Ellis which yesterday revealed prime central London sales of properties valued at £1m-plus had plummetted 26 per cent in the past year.
Tom Bill, head of London residential research for Knight Frank, says buyers have been in restrained mood for because of the adverse impact of George Osborne’s stamp duty reforms on high-end properties typically found in prime areas of the capital, and because Chinese stock market uncertainty has deterred high net worth UK and foreign buyers from committing to expensive residential investments.
As a result, annual house price growth in central London is between 0.4 per cent and 1.7 percent - the lowest for more than five years.
Sales volumes are down by a fifth in the three months to July compared to the same quarter of 2014.
“The uncertainty caused by China’s currency devaluation on the prime central London property market has been twofold” says Bill.
“On the one hand, it has caused some buyers to postpone decision-making until there is a greater sense of certainty. On the other, there is evidence Chinese buyers have stepped up their interest in ‘safe haven’ global property markets like London and are increasingly looking for homes in ‘golden postcode’ neighbourhoods like Mayfair - although it is too early to discern any impact on transaction levels” he admits.
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Hmm, it's hard to say the prime market is every really in the doldrums, with properties going for prices of £1m and upwards. I understand the frustrations, but there are far more important issues to be dealing with.
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