The GV Perspective
Spring 2016

A range of global and domestic factors have caused the prime central London residential market to finally slow down, recording the lowest annual growth in six years. Longer term issues include low oil prices, the economic difficulties in China and domestic tax changes, while the upcoming Mayoral election and EU referendum are affecting the market in the shorter term. While March 2016 saw annual price growth across prime central London remaining positive at 0.8%, areas such as Knightsbridge and South Kensington have started to decline. Areas such as City & Fringe and Islington, however are seeing positive growth of 8.1% and 8.2% respectively. This has attracted international investors, who are also diversifying to the sub-£2 million price bracket, with its above average performance.

Despite the challenges prime central London property has still performed well. The total return was 4% in February 2016, outperforming asset classes such as equities and hedge funds. Golden Venn believes the prime market will continue to slow this year, which is likely to lead to price declines in the sales and rental market. However, 2017 should see fundamentals – such as the weaker pound, more realistic pricing levels and London’s appeal as an international destination, reignite the market.