The average cost of a home in London’s most expensive neighborhoods fell by almost 7% in the year to January as sellers cut prices to secure sales in a tricky market.
According to data by real estate consultancy Knight Frank released Monday, prices were down 6.7% across prime central London. This, however, masked even deeper falls in certain neighborhoods like Hyde Park where prices fell 14%.
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That neighborhood was followed by Chelsea, Kensington and Notting Hill, which saw drops of 13.3%, 11.9% and 9.8%, respectively when compared with January 2015.
The report stressed that it’s the two successive stamp duty increases that are holding sellers back as opposed to economic and political uncertainty surrounding the Brexit "yes" vote and the Trump presidency.
"While Brexit and Donald Trump dominate the wider political and economic landscape, it would be wrong to overstate their impact on the prime London property market," said Tom Bill, head of London residential research at Knight Frank.
"Higher rates of stamp duty is still a bigger issue than the prospect of article 50 being triggered in March," Mr. Bill said.
The U.K. government slapped higher stamp duty rates on more expensive homes in December 2014 and made it cheaper on average for those purchasing homes worth less than £1 million.
Under the old system, a buyer of a £2 million home would have had to pay £100,000 in stamp duty, but this has risen to £153,750. The additional cost for a £6 million property, meanwhile, has jumped from £420,000 to £633,750.
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What’s more, in April last year the government introduced a 3% surcharge for those buying a second home or a rental property.