Leading fixed fee estate agent, eMoov.co.uk, has released its latest look at demand for housing in the prime central London market for £1m+ properties. The research shows that just one month on from April’s stamp duty changes, demand for property in London’s most prestigious postcodes has tumbled, now at its lowest point since eMoov began recording the research over a year ago.
eMoov’s Prime Central London Property Index records the change in supply and demand for property above £1m across London’s most prestigious areas, by monitoring the total number of properties sold in comparison to those on sale.
The research shows that PCL property demand is at just 10% on average, having fallen -23% since they last analysed the market, prior to the additional 3% levy to stamp duty for second home and buy to let properties – introduced on 1st April.
On the run up to the stamp duty deadline eMoov found that the rush to complete had revived the capital’s top end market, with PCL demand bucking its downward spiral and increasing for the first time since May last year.
However, it seems that this resurrection was short-lived as just one month since stamp duty deadline day, demand has plummeted to its lowest level on record.
In fact, just one area across the prime central London market has maintained March’s upward trend of demand growth. Fitzrovia is the only locations where demand hasn’t dropped or remained static since March, albeit an increase of just +14%. Year on year the area is joined by Belsize Park, Maida Vale, Primrose Hill, Holland Park and Marylebone as the only other areas to have seen a positive movement in property demand since May last year.
Where current demand levels are concerned, Islington is the most in demand area at present, with demand at 21%. Belsize Park (19%), Chiswick (18%), Maida Vale (16%) and Notting Hill (12%) complete the top five hottest for PCL property demand.
But at the reverse end of the table, the outlook is worrying. At 4%, St Johns Wood and Mayfair are not only the coldest spots in prime central London but are suffering from some of the lowest demand levels recorded.
It’s now abundantly clear that the brief resurrection of London’s prime central London market witnessed in March, was an artificial skew as many scrambled to complete a sale before April’s stamp duty deadline.
It seems the extra 3% levy has brought London’s top-end market back to its knees once again and this will inevitably lead to further, sizeable reductions in property values across such well-heeled areas.
Add this stamp duty penalty imposition to the approaching threat of Brexit, current economic woes across global powerhouses such as Russia and the slowdown in the Chinese economy, plus extremely low oil prices that are failing to fill the coffers of Middle Eastern buyers and it makes for a toxic cocktail of PCL doom.
There will always be demand for such property to an extent, but the jewel in London’s property crown is certainly losing its shine where the majority of buyers are concerned.Russell Quirk