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London house prices: The capital's most exclusive homes are going for bargain prices


10-03-2015

 

Growth in house prices in upmarket areas such as Kensington was muted in September (Source: Getty)

Another day, another sign the top end of London's property market is in the doldrums, after figures by Knight Frank showed house prices in the capital's most exclusive areas grew just 1.3 per cent in September on the same month last year. 

That's the lowest rate of growth since October 2009 - and in some parts of west London, prices fell as much as three per cent. 

It was telling that the number of prospective buyers fell by more than a third (although the number of actual viewings only declined by four per cent), as London's traditional top-end buyers - wealthy people from the Middle East and Asia - were hit by everything from the fall in oil prices to jitters about Chinese growth.

New stamp duty rules, introduced last year, have also taken their toll - research by Savills published earlier this week showed the value of homes in the capital worth more than £2m (which had the most punishing levels of tax placed on them) had fallen just over one per cent. For those worth more than £5m, that figure was close to five per cent. 

But interestingly, the Knight Frank figures showed the rental market has been hit just as hard: annual rental value growth declined 2.4 per cent in September, the figure's lowest level since the same month last year. So those economic woes are hurting landlords as well. 

Tom Bill, Knight Frank's head of London residential research, said buyers' sensitivity had "resulted in a flight to quality, meaning demand is particularly strong for properties in the best condition and on a prime floor, street or square".

"There was no sense the market is entering full-blown recovery mode after what has been a subdued 2015.”

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