Falling since 2014, house prices in central London are finally beginning to level off, thanks to slowing declines in the third quarter, according to real estate adviser Savills, which released a new forecast Tuesday.
Prices in prime central London slipped 1% in the third quarter of 2017, bringing the total annual fall to 5.2%. Values are now 15.2% below their 2014 peak.
But price growth down the road is expected, the report said. The five-year price growth is forecast to total 20.3%, far outperforming outer London, a market that is more dependent on domestic buyers employed in the financial and business services sector. Average growth in that market is projected to total 10.2% by 2022, according to the report.
Though long-term growth is predicted, the market must first grapple with Brexit. The uncertainty surrounding the U.K’s departure from the European Union is thought to be pointing to two further years of stagnant growth.
“Where sellers are pricing for today’s market, transactions are proceeding, but the market is highly discretionary and price growth is not anticipated until there is clarity over the U.K.’s future relationship with Europe,” said Lucian Cook, Head of UK Residential Research.
Over the next five years, growth is predicted to increase faster—though not by as much—outside of London, in the U.K’s prime regional markets, according to the report. Regional markets are expected to see marginal price rises as early as next year, though some remain below their 2007 peak. London’s suburbs and extended commuter belt—the markets most dependent on equity flows from the capital—will wait until 2019 or beyond to see price growth, the report said.
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