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London luxury home values set for 20% rebound over five years
[LONDON] Home values in London's best neighbourhoods are set to rise by 20.3 per cent over the next five years as Brexit concerns wane and the city's position as a global financial hub attracts international buyers, according to broker Savills.
Values in prime central London will be flat in 2018 - as buyers wait for a clearer picture of Brexit's impact - before starting to rebound in 2019, London-based Savills said in a report.
That would mark the end of a slump that has seen prices drop 15.2 per cent from a 2014 peak.
In other prime areas of London, which are less reliant on international buyers, prices will rise 10.2 per cent in the five years through 2022, the broker estimates.
Sales of London luxury homes have been buffeted by successive tax increases, Brexit uncertainty and a snap general election in June that saw Prime Minister Theresa May lose her parliamentary majority.
The number of owners who cut prices to sell homes worth more than £1 million (S$1.826 million) jumped 90 per cent in the first half from a year earlier, Savills data show.
Last year, Savills predicted that prime central London prices would gain 20.8 per cent in the five years through 2021 while other prime areas would gain 14.6 per cent over that period.
Risks regarding London's position as a global hub have been "overplayed", according to Yolande Barnes, head of world research at Savills.
"Whatever the challenge from other cities, London will almost certainly remain a key global financial center and develop as one of several European hubs for the growing tech sector," Ms Barnes wrote in the report.
"Its prime markets will therefore benefit from new domestic wealth generation as well as attracting wealthy international buyers."
There are 394,000 properties in Great Britain valued at more than £1 million, with a combined value of £883 billion, Savills estimates. Of the total, 63 per cent are in London, according to the report.