The estate agent Savills has predicted that London’s top-end neighbourhoods, such as Knightsbridge, will record no growth over the next two years.
Areas south-west of the capital will become less stable and face increasing pressure. Barnes, Wandsworth and Clapham are likely to face a drop in value by an estimated 4.2 percent.
“The prime central London market may be bottoming out, but we don’t expect a return to growth until there’s greater clarity regarding the Brexit process,” said Lucian Cook, Savills’ head of residential research.
“A backdrop of political and economic uncertainty means the market will remain highly discretionary, while the high tax environment means that even international buyers remain reluctant to take advantage of the currency play. Our forecasts anticipate it will be two years before we see a bounce in values.”
“We expect continued weakness in price performance in key outer prime London markets, and are forecasting small falls next year. These markets are much more dependent on domestic wealth generation and access to borrowing than prime central London. As such, our forecasts are for much more modest house price growth over the next five years.”
Homes in the south-west of London will be less affected by the stamp duty hike in December 2014 than those homes in central London. They will, however, be under other pressures including mortgage constraints and the prospect of future interest rate rises.
The top-end areas of south and west London will be “coming under increasing pressure from fragile buyer sentiment”. Buyers are likely to feel the constraints of the new rules surrounding tighter mortgage, as well as uncertainty surrounding Brexit.
According to Savill’s new report, Fulham is the area that recorded the steepest falls. Prices fell by 4.6 percent in 2017 and were down by over 14 percent compared to their 2014 peak.