An elegant Georgian facade, a full-width balcony and an exclusive address in South Kensington just steps from the Natural History Museum and the V&A. Yet the listing price of this west London flat at Queen’s Gate Gardens has dropped by nearly £1m since last year, to £4.4m. It is far from an isolated case.
A nearby house originally listed at £20m was slashed to £14m this year, says a local estate agent. In neighbouring Notting Hill, a stucco-fronted property that came to market two years ago at £16m is now being offered for less than £14m, they said. London’s premium property market is stuck in a rut.
While borrowing costs and stretched affordability weigh on everyday buyers, the city’s richest residents are also making deep cuts to the prices of their multimillion-pound homes. This market is a world away from the rest of the UK property market – where the average house price was just under £275,000 in September, according to Nationwide. The well-heeled neighbourhoods also present a stark contrast with much of the capital, where Londoners struggle to get on to the housing ladder, face rising rents and a lack of affordable housing, and estate agents report the market for flats is now “dead”.
But neighbourhoods such as Knightsbridge, bordering Hyde Park and home to Harrods, are also feeling the pinch, said Harry Dawes, a buying agent based in Belgravia. It can now be bought at £2.5m.” For decades, London’s property prices raced ahead of the national average. But that gap has been slowly narrowing: while the average price of a UK home rose by about 2% in the year ended in June, prices in inner London boroughs fell by 8.3%, according to the Office for National Statistics.
That drop has been particularly pronounced in Westminster – which includes areas such as Marylebone, Belgravia and Mayfair – with prices down 25.4% year on year. In the City, prices slumped by 20.4%, and in Kensington and Chelsea, prices fell 14.7%. Properties in the capital became overvalued in the mid-2010s after a period of rapid price growth, said Anthony Payne, the chief executive of the data analyst LonRes.
London was then hit hard by Brexit, the Covid pandemic, higher property taxes and a surge in borrowing costs. Now, owners who bought at the peak now face losses of as much as 25% if they choose to sell, according to estimates from the estate agent Savills. Many of our sellers have decided that enough is enough – let’s just sell the property and move on.” Tax changes have put sellers on edge, too, he added.
Extract — continue reading at the source.
