Property in the capital’s prime areas sells for an average of 9.1% below the asking price, as buyers ask sellers for bigger discounts.
Property data tracker LonRes released some figures last week showing that 45% of properties were reduced in price before being sold during Q1 of 2017.
The slowdown was caused by higher stamp duty regulations and the levy on second homes, both of which hit the prime property market in London especially hard. The major discounts coincided with an annual drop of 26% in the number of properties sold during the last quarter.
However, it wasn’t only buyers who had mixed feelings considering the changing market conditions in London’s prime market. A total of 15% of properties were removed from the markets as vendors decided they would rather wait than sell a property below value.
Katy Warrick, head of London residential research at Savills, explained:
“We expect volumes to peak this year and fall over the next five years in response to falling sales. And by 2021, we forecast that just 34,700 new homes in the year will be built in London, little more than half the 64,000 new homes we think London really needs annually to meet demand from a strong economy and growing workforce.”
This shows that, the supply and demand gap isn’t going anywhere and will probably remain the main influencing factor when it comes to house prices across the UK.
London’s prime property market my as well be more of the exception to the rule, as the way this small segment of the market has been hit by changes such as the additional stamp duty surcharge isn’t representative for the rest of the country.
