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Home Sales Slide By 18% in London’s £10M-Plus Market

Sellers are lowering asking prices to entice buyers

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A terrace of residential properties in an affluent area of London adjacent to Regents Park.

Oli Scarff / Getty Images
A terrace of residential properties in an affluent area of London adjacent to Regents Park.
Oli Scarff / Getty Images

The number of £10-million-plus (US$12.5 million) sales in London’s most exclusive boroughs slid by nearly one-fifth in the first nine months of the year.

According to a report released Thursday by global real estate consultancy Knight Frank, sales dropped 18% year to year between January and the end of September, from 101 to 83, as two sales tax increases since the end of 2014 scared off many would-be buyers.

However, Knight Frank believes that there are tentative signs of recovery in London’s super prime housing market as sellers become more willing to lower prices to counteract the increased tax burden.

More:Click Here to Read About Historic London Apartment on Sale for a Record £150 Million

Uncertainty surrounding the Brexit and when negotiations with the European Union will actually begin has also made sellers more realistic about pricing.

These price reductions coupled with currency savings from the weak pound, which has fallen about 16% against the dollar since the vote, have led to an uptick in interest.

"There has been a notable uptick in activity in recent weeks," said Tim Wright, a partner at Knight Frank. "More realistic asking prices and a favorable currency movement mean many buyers have benefited from a twin boost."

As a result, the number of new prospective buyers in the market for properties above £10 million in the 14 weeks following the E.U. referendum on June 23 increased 18.8% year-on-year, while the number of viewings rose by half.

A separate report from Knight Frank last week showed that super-prime rental transactions in central London increased 16% to 109 in the year to September compared to the previous 12 months.

More:Read How London’s Super Prime Landlords Benefit From Stamp Duty Hikes and Brexit

Many families are opting to rent to avoid hefty tax bills after the U.K. slapped two successive stamp duty hikes on expensive properties. The stamp duty on the purchase of a £15 million property is £1.7 million, the equivalent of three years’ rent.