How far could prices in London fall?


The London property market has been through the toughest changes in the past 12 months – a result of the unstable political and social climate and the repercussions of the Brexit vote. This turbulent backdrop is now beginning to manifest itself in changes to property prices in the most affluent areas.

Stamp duty changes rocked the central London housing market last year as buyers became less keen to fork out thousands of pounds in transaction taxes for homes worth over £1m.

Asking prices on high-end homes in London’s most affluent boroughs were slashed – some by as much as 30 per cent – as home-movers sought to shift their stock.

By January, house prices in Chelsea had fallen by 13 per cent, and in Kensington, prices were down by nearly 12 per cent.

Anthony Codling, analyst at Jefferies Bank, has predicted that Zone 1 prices will fall by 10 per cent on average this year, and that prices in Zone 2 will be flat.

“Uncertainty likely to remain in my view until will know what London looks like once Article 50 has played out,” he told City AM. “If the financial services sector moves to mainland Europe, minus 10 per cent may be optimistic, if London retains its current importance and global city status, minus 10 per cent may be overly pessimistic.”

Simon Rubinsohn, RICS chief economist, said tax changes have had a significant impact on central London prices, and that in the near-term, prices might “slip a bit more”.

But, over the next year the market will be more stable, he said, as much of the price correction has happened already.

“There are signs that perhaps there will be a more stable trend in prices. You’re not going to see prices shoot up though.”

Knight Frank’s research shows that central London house prices fell by seven per cent last year, and the estate agents have forecast that prices on prime homes in outer London will fall by 1.5 per cent. However, they expect west London prices to stay flat in 2017.

Meanwhile, the Guardian reports that more than half of the buyers of new homes have experienced major problems with their properties, according to research, which comes after Bovis Homes agreed to pay £7m compensation to customers for poorly built houses.

A YouGov survey for the housing charity Shelter found that 51% of homeowners of recent new builds in England said they had experienced major problems including issues with construction, unfinished fittings and faults with utilities.

The survey, which polled 4,341 UK adults online, was published alongside a Shelter report that concluded that the housebuilding sector is rigged in favour of big developers and land traders rather than families looking for homes.

In the report, titled New Civic Housebuilding, the charity calls for a return to building good-quality, affordable homes like the model villages for Cadbury workers at Bournville, the red brick developments of the Peabody and Guinness estates, the Victorian and Georgian terraces in Edinburgh and Bath, and the garden cities of Letchworth and Welwyn.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

How far could prices in London fall?

How far could prices in London fall?


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.