Prime central London property prices down 1.4% in Q2 amid ‘pre-referendum uncertainty’ – Savills
The dramatic decline in the value of the British pound after the ‘Brexit’ vote has spurred Gulf investors to re-enter the prime London property market, according to Savills.
Uncertainty around the UK vote on membership of the European Union (EU) helped push prime central London property prices down by 1.4 percent in the second quarter, the real estate firm said.
But the decline of the value of the pound – which fell to a 31-year low against the dollar immediately after the June 23 vote to leave the EU – has prompted renewed interest in the market among Gulf investors.
“Falls in sterling have prompted some Middle East buyers to re-enter the market, while there has also been a fair share of speculative bids from those hoping to secure a bargain. Against this context, sellers have generally taken a pragmatic approach around pricing without having to slash their expectations,” said Lucian Cook, head of UK residential research at Savills.
Ed Macura, Partner at the Core UAE Associate of Savills, said: “In the short-term, Gulf investors are increasingly taking advantage of the devaluation of the pound as a result of the referendum. In the medium to long-term London’s fundamentals remain intact, a growing population with an increasing housing shortage and a city lifestyle that is always going to be appealing to an international audience.”
The overall prime London property market fell by 0.2 percent during the second quarter, although the decline was more pronounced in the central area of the UK capital, Savills said.
Average prime London values are now 1.4 per cent below their pre-December 2014 level, when stamp duty rates on high-value homes were increased. And values in central London are 3.9 per cent down year-on-year and 8 per cent below their Q3 2014 peak.
“There have been conflicting signals in the market in the period post referendum, which suggests the impact of a vote to leave the EU will only become clear over coming months as the market finds its level,” Cook said.