Cluttons has released its London Residential Market Outlook for Spring 2018.
While the end of 2017 delivered a ray of hope in the form of a breakthrough in the Brexit negotiations, the protracted and messy EU divorce proceedings have had a profound impact on residential values in prime Central London.
Furthermore, despite a slowdown in construction starts, the net absorption rate of new build homes, especially those at the top of the price spectrum, continues to recede. This Brexit induced anxiety has curtailed new housing starts, which has meant that 180,000 permitted units were yet to break ground last year across London.
One of the upsides in the market has been the continued interest amongst buyers from the Middle East and Asia, who are capitalising on currency linked discounts to acquire second homes and investment properties. However here too, there is an increased interest in acquiring multiple assets, instead of a single super prime property.
The absence of motivated sellers has been the biggest factor that has helped values remain relatively stable. 2018 is likely to be the final year to take advantage of softer market conditions and to snap up homes at values that have not been recorded since 2013 as from 2019 onwards, prices are expected to increase at an accelerated pace.
Further detail, along with our latest five year capital and rental value forecasts are presented in the report.