The real estate market in prime central London—home to some of the most expensive and coveted property in the U.K—is being pulled from the doldrums by high-end buyers taking advantage of discounted prices, according to a report from property data agency LonRes.
Prices edged up 1.2% in prime central London this quarter compared to the same time last year, the highest level of annual growth recorded since the third quarter of 2015, the report, released this week, said.
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Though LonRes recorded 2% fewer sales, new listings rose 11% in the same timeframe.
Since the city’s real estate market peaked in 2014, a combination of increased stamp duty for big-ticket buyers and second-home owners, higher taxes for landlords and political and economic uncertainty has hindered the market.
Prices in prime central London are now between 10% and 15% below their 2014 peak, according to Marcus Dixon, head of research and data analysis at LonRes.
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But price falls "appear to have reached a plateau, certainly for homes over £2 million (US$2.58 million)," Mr. Dixon said in an email to Mansion Global. "Buyers who have been waiting to purchase appear to be seeing value in this market."
"Buyers tend to be looking for longer-term homes rather than short-term investments and are realizing they can buy at a lower price than at the top of the market, even with higher stamp duty rates," he added. "While no one can precisely call the bottom of the market, it does feel as if we are bumping along the bottom for now and this is adding confidence for those looking to buy."
Looking ahead, LonRes predicts Brexit uncertainty to remain the most significant barrier to increasing sales activity over the next 12 months. While they do not anticipate significant price rises over the next year, significant falls aren’t expected either.