House prices in London’s prime markets are levelling off though investors continue to see significant value from their investments.
Five-year price growth to the end of 2022 is expected to total 20.3 per cent, significantly outperforming wider prime London, a market that is more dependent on domestic buyers employed in the financial and business services sector for whom mortgage affordability is more of an issue. The average growth in these markets is projected to total 10.2 per cent, according to real estate adviser Savills.
While the projected five-year growth of 20 per cent may look ambitious in the current climate, it represents a departure – likely permanent – from the historic trend, Savills says, which saw average annual price growth of 5.7 per cent above the rate of inflation between 1979 and 2014.
In future, the higher costs now associated with buying a high value home, and the greater exposure to capital gains tax and inheritance tax for overseas owners will continue to moderate price growth regardless of the Brexit outcome.
The investor interest for prime housing markets in London continue to remain the same considering the strong fundamentals of the residential property market. As prices are not at their peak, it is an ideal time to evaluate investment options in this market.
London will almost certainly remain a key global financial centre and develop as one of several European hubs for the growing tech sector. Its prime markets will therefore benefit from new domestic wealth generation as well as attracting wealthy international buyers - Yolande Barnes, head of world research at Savills