W A Ellis and Knight Frank are the two latest estate agency’s to highlight the dramatic decline in the sale of London’s most expensive homes. W A Ellis claim that over the past year there has been a 26% drop in sales of homes worth over £1m.
Richard Barber, a director at W A Ellis says “After one of the most tumultuous weeks on record for the world’s financial markets, there is naturally considerable speculation regarding the real estate manifestations of the economic slowdown in China and knock-on negative impact for global equities”.
He warns “There are exceptions to this trend, notably from economies experiencing a more severe currency devaluation; Russia, China, and Malaysia are all likely to fall into this category and investment flows from these countries may moderate through the remainder of 2015” .
Knight Frank have admitted that the prime London sales market is “subdued” and blames the international stock market and government for the drop.
Head of London residential research for Knight Frank, Tom Bill has indicated that he believes buyers have been in a restrained mood due to the adverse effects of George Osborne’s stamp duty reforms, typically ON the prime London areas and because Chinese stock market uncertainty has deterred high net worth UK and foreign buyers from committing to expensive residential investments.
This has led to annual house price growth in central London being between 0.4% and 1.7%, which is the lowest for over than five years and sales volumes are down by a fifth compared to the same quarter of 2014.
Tom Bill continues “The uncertainty caused by China’s currency devaluation on the prime central London property market has been twofold. On the one hand, it has caused some buyers to postpone decision-making until there is a greater sense of certainty. On the other, there is evidence Chinese buyers have stepped up their interest in ‘safe haven’ global property markets like London and are increasingly looking for homes in ‘golden postcode’ neighbourhoods like Mayfair – although it is too early to discern any impact on transaction levels” .