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Notting Hill is worst performer in London's luxury-home market
[LONDON] Home values in Notting Hill, the London district popular with bankers and pop stars, fell 3.8 per cent in the 12 months through July as demand for luxury property in the UK capital slowed.
Prices declined by 1.2 per cent in both the Chelsea and Knightsbridge neighborhoods and 0.9 per cent in Kensington as a rise in the sales tax for the most expensive homes damped demand, Knight Frank LLP said in a report on Monday. The average annual gain in the 13 districts that make up prime central London slowed to 2 per cent in the period from 7.9 per cent a year earlier, the broker said.
"Price growth to the west of Hyde Park has underperformed the prime central London average over the last year," Tom Bill, head of London residential research at Knight Frank, said by e- mail.
"These are typically family-house markets where strong demand from the financial services sector has moderated in recent years."
Chancellor of the Exchequer George Osborne raised the so- called stamp duty sales tax on homes priced at 937,000 pounds (US$1.46 million) or more in December. The number of homes that sold for 2 million pounds or more fell 25 per cent in the first quarter compared with the same period in 2014, Knight Frank said.
"A succession of tax changes has contributed towards low- single-digit annual growth," Mr Bill wrote in the report. "Buyers and sellers are more prepared to sit on the sidelines until later this year, unafraid of missing out on the imminent return of stronger growth."
Mr Osborne has also added a capital-gains tax on homes sold by people living abroad and introduced an annual tax on companies that own homes worth more than 1 million pounds and do not lease them out.
The best-performing district was the City of London and its fringe neighborhoods, where values gained 6.6 per cent in the period.