9th October 2015
The frantic pace of growth seen in the cost of the capital’s luxury homes may be starting to wane.
Upmarket estate agent Knight Frank has admitted rapid growth in property prices is now slowing and it has cut its forecast for house price growth in some of London’s wealthiest areas.
It has slashed its price predictions by half, cutting expectations for 2016 prices from a rise of 4.5% to a rise of 2%. It said the luxury end of the London property market ‘faced a number of headwinds in 2015, which reduced annual price growth from 5% at the end of last year to 1.3% in September’.
These factors include sharp increases in the cost of stamp duty for expensive homes and a decline in the interest from China, which has faced a number of market woes.
Liam Bailey, global head of research at Knight Frank, said: ‘The strength of the UK’s economic recovery, employment growth in London and the likelihood of continued low interest rates mean price growth will remain positive next year.’
Figures from the Halifax this week show a slowdown is not just happening in the luxury market. Across the UK, house prices fell 0.9% between August and September – their biggest monthly fall in a year.