Demand for property in London’s most prestigious locations has fallen a few weeks after a new stamp duty charge of 3% was introduced on buy to let and second homes, new research shows.Property demand in the prime central London sector is at just 10% on average, having fallen 23% since the new surcharge was introduced, according to the PCL index from fixed fee estate agent eMoov.
It is now at its lowest since the firm began recording its data over a year ago in the index which records the change in supply and demand for property above £1 million across London’s most prestigious areas, by monitoring the total number of properties sold in comparison to those on sale.
On the run up to the stamp duty deadline eMoov found that the rush to complete had revived the capital’s top end market, with demand bucking the prime central London’s downward spiral and increasing for the first time since May last year.
However, it seems that this resurrection was short lived as just one month since stamp duty deadline day, demand has plummeted to its lowest level on record.
In fact, just one area across the prime central London market has maintained March’s upward trend of demand growth. Fitzrovia is the only locations where demand hasn’t dropped or remained static since March.
Year on year the area is joined by Belsize Park, Maida Vale, Primrose Hill, Holland Park and Marylebone as the only other areas to have seen a positive movement in property demand since May last year.
Where current demand levels are concerned, Islington is the most in demand area at present, with demand at 21% followed by Belsize Park at 19%, Chiswick at 18%, Maida Vale at 16% and Notting Hill at 12%.
At the other end, at 4%, St Johns Wood and Mayfair are not only the coldest spots in prime central London but are suffering from some of the lowest demand levels recorded.
‘It’s now abundantly clear that the brief resurrection of London’s prime central London market witnessed in March, was an artificial skew as many scrambled to complete a sale before April’s stamp duty deadline,’ said eMoov chief executive officer Russell Quirk.
‘It seems the extra 3% levy has slowed London’s top end market and this will inevitably lead to further, sizable reductions in property values,’ he added, and pointed out that other potential threats include the UK voting to leave the European Union, economic slowing in countries like Russia and China and low oil prices.
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