London house prices remain defiant, but Mansion Tax proposals threaten future reputation, says Marsh & Parsons

The key findings from this week’s Land Registry HPI for September 2014 are as follows:

  • Annual price increase of 7.2 per cent with the average price in England & Wales now £177,299 compared with a peak of £181,324 in November 2007.
  • Monthly house prices are down 0.2 per cent since August.
  • 863 repossessions in England & Wales during July 2014.
  • More than 93,350 residential properties in England & Wales lodged for registration in September.
  • The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 18.4 per cent.

Peter Rollings, CEO of Marsh & Parsons, comments: "House prices rises are flattening on a monthly basis, as growth relaxes after a rousing first half of the year. But considered as a whole, the UK property market is still on an upward trajectory and prices have seen a considerable uplift in the past year. London is still showing healthy annual growth, and the unparalleled draw of living or investing in what many regards as the world’s greatest city gave the property market here a shortcut in the recovery. As a result, the average price of a Prime London home has risen by £163,973 over the past year.

"But London’s economy thrives on its global standing as an unbeatable destination both to live and to do business and talk of a ‘mansion tax’ and other populist wealth taxes threatens to erode this reputation.  A quarter of all Prime London property purchases are made by overseas and foreign nationality buyers, though the vast majority have chosen to live and work here, adding hugely to the strength and vibrancy of the London economy. The uncertainty surrounding these proposals could shake the foundations of London’s property market as the political rhetoric picks up ahead of May’s general election, and we’d enter dangerous territory which could filter down to all sections of the market if these buyers packed up and turned their attentions elsewhere."

The latest Marsh & Parsons Property Monitor also finds that:

  • After strong growth over the past 12 months, there has been a sharp drop in quarterly price growth at the top end of the housing market in Prime London.
  • House price growth across Prime London has slowed to 0.5% in the three months to September 2014, down from 3.1% in the previous quarter.
  • Property values in Chelsea dropped 0.4% in the three months to September, the first fall since December 2012 as growth at the top end of the market cools fastest.
  • The ratio of buyers per available property in Prime London has dropped to just 12 in September, compared to 24 in January.
  • Supply of property in Prime London has risen 13% in the last three months.
  • As central London price growth levels off, Outer Prime hubs such as Clapham, Balham and Barnes are still making considerable headway — and the average one-bedroom property in Outer Prime London has risen in value by £240 a day over the past year.
  • Across Prime London, 27% of properties are worth £2 million or more.

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