Price Gains for Costliest London Homes Slowest in 3 Years
Tue 30 Sep 2014
Prices of London 's most expensive homes gained at the slowest pace in more than three years in the third quarter as the market took a "necessary pit-stop," according to Marsh & Parsons Ltd.
Values rose 0.5 percent in the three months through September, a slowdown from 3.1 percent growth in the previous quarter and the smallest gain since the second quarter of 2011, the London-based broker said in a report today. The average price in Chelsea, one of the city's most exclusive neighborhoods, fell 0.4 percent to 2.4 million pounds.
"We've reached a plateau in the course of house-price growth, and the path paved out for London property prices for the rest of 2014 looks to be leveling off," Marsh & Parsons Chief Executive Officer Peter Rollings said in a statement.
U.K. financial officials have damped domestic demand for homes by limiting the number of high loan-to-income mortgages and demanding new affordability checks. More home owners also offered their properties for sale in London's best districts, giving buyers more choice, Marsh & Parsons said.
Home values in London's most sought-after central districts gained 9 percent in the third quarter from a year earlier, the report said. Prices in the capital overall rose 20 percent in the year through August, according to the Office for National Statistics .
The opposition Labour Party has pledged to impose an annual levy on properties valued at 2 million pounds or more, often referred to as a mansion tax, if it gains power following elections next year.
"Caution will be exercised by many homeowners and would-be investors, as high-end property is marked out as a key battleground" in the elections, Rollings said. "Wading in with a 'mansion tax' threatens to douse the growth at the top tiers of the market.''
Marsh & Parsons, a unit of LSL Property Services Plc (LSL) , defines prime districts as stretching from Balham in the south to Camden in the north. It includes neighborhoods such as Barnes, Chelsea, Fulham and Battersea.
About 56 percent of homes in London's best districts are now worth 1 million pounds or more, the broker said. Investors were the biggest buyers of homes in prime neighborhoods, purchasing 26 percent of the properties, down from a record 31 percent in the previous quarter.