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Prime central London property investment declines 10%

Prime central London property investment declines 10%

Demand for real estate in London’s most exclusive addresses falls as investors turn to high-performing regional cities.

Summary:

  • Investor demand for property in London’s prime central market has fallen by 10% since the second quarter of 2016
  • Waning interest has continued post-Brexit, in addition to April’s additional stamp duty levies on second home purchases
  • However interest remains strong across the wider UK, with investors turning to cities such as Manchester to acquire assets during a current currency window of opportunity

More investors are continuing to leave London’s prime central property market.

Demand for real estate in the capital’s most exclusive postcodes has fallen by 10% since the second quarter of the year, the latest index from estate agent eMoov shows. Around 75% of London’s most prestigious locations have recorded static or reduced levels of demand.

This follows a report from the UK’s largest estate agency, Countrywide, that outlines a slowdown in the property market following the vote for Brexit is “more marked in London, the south-east and expensive prime markets”, while the rest of the UK remains unaffected.

With property in London’s prime markets becoming increasingly unaffordable, the decline in sentiment was accelerated following the introduction of new stamp duty levies on second homes in April. Following Brexit, it appears that many overseas-based investors, a pivotal demographic for the performance of prime London properties, have further reduced their interest in the capital and shifted their focus to high-performing regional markets.

“Whilst the rest of the UK market seems to be ticking along with little impact as of yet, the immediate weakening of the sterling and negative response from the rest of the EU seems to have had an instantaneous knock-on effect on the prime central London market,” said Russell Quirk, Chief Executive Officer at eMoov.

Outside of London, overseas investors have been quick to identify the opportunity of acquiring UK real estate assets at a time when a fall in the value of the currency just made British property more affordable in international terms.

Cities such as Manchester boast the UK’s highest yields and one of the country’s most undersupplied property markets.

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