The report also showed slower growth in regional markets dependent on London buyers.
A marginal -0.2 per cent fall in the three month period prior to the referendum left average prime London values down -0.7 per cent year on year, and -1.4 per cent below their pre December 2014 level, when stamp duty rates on high value homes were increased.
Falls were most pronounced in prime central London, where prices fell -1.4 per cent in the quarter. This left values in London’s most exclusive markets on average -3.9 per cent down year on year and -8.0 per cent below their Q3 2014 peak.
Weakened sentiment and a slowing of the London market also impacted the prime regional markets, resulting in small quarterly price falls (-0.4 per cent) in the suburbs. Property in the inner and outer commuter zones around London saw marginally positive price growth in the quarter limited to just 0.2 per cent and 0.9 per cent respectively, as the market slowed in response to a lack of urgency amongst buyers.
Lucian Cook, head of UK residential research at Savills:
“There have been conflicting signals in the market in the period post referendum, which suggests the impact of a vote to leave the EU will only become clear over coming months as the market finds its level.”
“Falls in sterling have prompted some international buyers to re-enter the market, while there has also been a fair share of speculative bids from those hoping to secure a bargain. Against this context, sellers have generally taken a pragmatic approach around pricing without having to slash their expectations.
“Prime regional markets are at a different stage in their cycle, having been slower to recover peak 2007 values, and therefore appear to have been less affected by pre referendum uncertainty.”
