London home prices continue to fall in upmarket neighborhoods along the River Thames, though buyers are returning with more gusto, according to a series of reports Tuesday from London-based real estate agency Knight Frank.
In Riverside, an area comprising Thames-side bits of Southwark in the east to Hammersmith in the west, prices for non-new build property declined 2.3% in the year to March compared to the year prior. Prices have declined 13.6% since September 2015.
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"Prices have edged down over the last year but the extent of the declines has reduced notably," said Matthew Smith, Knight Frank’s Riverside office head, in the report. "This bottoming-out process follows greater flexibility on the part of vendors, who have become more accepting of asking price reductions."
Transactions along the iconic river bottomed out in 2015 following a stamp duty hike in 2014 that imposed a 12% tax on the price of homes over £1.5 million. But activity has been steadily recovering since then.
Resale transactions increased 3% in the year to March compared to the previous 12 months.
Greater negotiability has helped boost market activity—there was an 18% increase in buyer demand in the year to March. The number of offers rose a resounding 53%, according to Knight Frank.
"Following asking price reductions, properties in more established schemes can represent good value for money, which has led to relatively strong trading in some instances," Mr. Smith said.
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Prices Begin to Level Off in Fulham and Richmond
Price declines have eased up in London’s riverside neighborhood of Fulham, and in Richmond, in outer London.
In Fulham, prices fell only 1.6% in the year to March compared to the previous 12 months. James Davies, Knight Frank's Fulham office head, said some prices are now in the realm of what buyers expect to pay, which should spur more activity moving forward.
"You have appropriately priced property that is quickly attracting offers. Fulham is undergoing a process that is further advanced in neighboring Chelsea, where pricing has adjusted in a meaningful way and vendors can see more comparable sales evidence," Mr. Davies said.
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Likewise, prices also fell 1.6% in the year to March in Richmond, an upmarket town on the eastern outskirts of London. Buyers remain cautious except for in traditional neighborhoods of Richmond Hill and Richmond Green, said Mathew Hahn, Knight Frank’s Richmond office head.
"There is a growing mood of pragmatism in the Richmond property market," Mr. Hahn said. "Pricing appears to have bottomed out, which means more buyers are comfortable making a financial commitment."