Sellers of luxury London homes are cutting asking prices on the largest proportion of properties in at least three years as high values, commodity-price declines and new taxes damp demand.
Vendors have cut the asking prices on 39 per cent of homes in central London's best districts since they were first offered for sale, according to data compiled by researcher Lonres in January. That's up from 33 per cent a year earlier, the data shows.
The reductions come ahead of an increase in the stamp-duty sales tax in April to as much as 15 per cent for the costliest homes for landlords and second-home buyers. The number of properties sold in the boroughs of Westminster and Kensington and Chelsea fell more than 25 per cent from January through October 2015 compared with a year earlier, broker Knight Frank LLP said this month.
"We have lost a whole chunk of the typical investment buyers," said Roarie Scarisbrick, a partner at Property Vision Ltd, a broker that advises prime-home buyers. "They are put off by stamp duty."
Values in London's best districts rose 5 per cent in the 12 months through January to a median of more than £932,000 ($1.3 million), according to an analysis of preliminary Land Registry data by Bloomberg. The most expensive home sold in January was a townhouse in Mayfair that fetched £15.7 million. The eight-bedroom property has a roof terrace, cinema room, gym and plunge pool, according to an internet listing for the property.
Prices across London postcodes rose 12.7 per cent in the 12 months through January and the median value is now almost £505,000, the Land Registry data shows. The average purchaser borrowed £339,000 when buying a home in the UK capital in the fourth quarter, according to government statistics.
