‘It feels like 2010,’ was the verdict last week of one seasoned operator in the prime London property market.
What they meant is that after a period of uncertainty and restraint, the smart money is beginning to take a longer, harder look at the top-end of the London market.
In 2010, the market was coming to terms with impact from the global financial crisis. In recent years, pricing has been adjusting to higher taxation, a political by-product of the downturn designed to address wider affordability concerns.
However the stamp duty increase of December 2014 for £1 million-plus properties, which had the single biggest dampening effect on demand, is nearly two and a half years old. Or about the same age as the financial crisis was at the start of 2010.
Asking prices increasingly factor in higher transaction costs and the result is a market showing signs of bottoming out. This is particularly true in the area known as prime central London, which bore the initial brunt of tax hikes and tends to exhibit trends that eventually ripple out to the rest of the capital.
Buyers and sellers can quickly gain a sense of urgency when they believe prices are on the rise, and we are clearly not at that point.
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