Homeowners looking to sell up in the most expensive areas of central London are cutting record six-figure sums off asking prices in the wake of the Brexit vote, according to figures.
Although the market is rising across much of the city, in the three months since the referendum the average price cut on homes across most of Zones 1 and 2 was a record £100,131, according to property analysts LonRes. In the same period last year it was £59,573.
In the “golden triangle” of postcodes around Kensington, Knightsbridge and Mayfair an average of £171,321 is now being slashed from asking prices, up from £150,120 in the three months before the June 23 poll.
One three-bedroom, ground-floor flat on Belgravia’s Eaton Square went on the market in January with Hamptons International for £6.35 million. This month, it was repriced at £5.995 million. Similarly, a two-bedroom flat at Hanway Gardens, a new building in Fitzrovia, was on the market for £1.7 million at the time of the Brexit vote with Fraser & Co. Its price was cut in July to £1.6 million and again this month to £1.55 million.
LonRes calculates that the price of almost half — 46 per cent — of central London homes sold since the vote have had to be “adjusted” before a buyer could be found. This compares with 36 per cent in the same period of 2015.
Marcus Dixon, LonRes’s head of research and the author of today’s report, points out that these lower prices are still simply asking prices, which are open to further negotiation before a sale is actually agreed. The figures provide one of the first indications of exactly how hard the vote to leave the European Union has hit central London’s market, which was already reeling from a series of steep hikes in stamp duty.
Russell Quirk, the founder and chief executive of online agentseMoov.co.uk, said many vendors have still not woken up to the profound change in the market over the past year.
He said: “The market in prime central London has taken a beating but homeowners are still pricing their properties unrealistically for current market conditions. Although the London property market remains stable despite buy-to-let stamp duty changes and the referendum, the upper end of the market is dwindling in desirability.”
Robert Fraser, managing director of London based Fraser & Co, which specialises in the sale of new-builds, said: “It is now a buyers’ market — within reason. If something is at £2.1 million or £2.2 million buyers will come in at 15 per cent below asking price with a view to tying it up at 10 per cent below. In the past they would come in at 10 per cent below with a view to tying it up at three or four per cent.”
Brendan Roberts, a director at Chelsea-based Aylesford International, blamed “enormous” moving costs for the slowdown. He said expectations of an influx of overseas buyers drawn by the collapse in the value of the pound have proved largely unfounded. “There are some but it is not a huge stampede, it is a trickle,” he said. “You get the sense they are sitting back because it could be cheaper tomorrow.”
Reference: http://www.standard.co.uk/news/london/brexit-fears-see-property-owners-slash-asking-prices-by-six-figures-a3377776.html
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