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London's luxury housing market is undergoing an 'unprecedented' slump

A combination of Brexit and tax increases is putting a serious squeeze on London’s luxury upmarket housing market and the UK’s wider luxury market as a whole

According to figures released by LCP, the number of sales involving houses valued above £10m plummeted 75% in the last six months falling to 15 compared to the 61 sales in the same period last year.

There were also similarly stark for falls for houses valued between £5m and £10m, which dropped by 51%, between £2m and £5m, which dropped 36%, and £1m to £2m, which saw a 33% decrease.

Most pressingly for London, super prime new builds were the hardest hit, with a 83% decrease in sales above £5m, representing a fall from 52 transactions to just 9.

Naomi Heaton, Chief Executive Officer of LCP believes a cocktail of Brexit-induced economic uncertainty, combined with the added pressures of tax increases, including the added 3% Additional Rate Stamp Duty (ARSD), is putting serious pressure on the top end of the housing market.

She said: “As can be seen over the last 6 months, the market appears to have finally succumbed to the constant residential tax hits from the Government.

“Against a backdrop of uncertainty around Brexit and the direction of travel of the UK’s economy, it seems that the introduction of ARSD has been one step to far for both domestic and international buyers.

“Developers have been particularly affected by the new landscape with only 9 properties sold above £5m, a staggering 83% fall compared with last year.

“With these top end sales typically off-setting the cost of providing more modest housing and essential cash-flow to reinvest into new development, the Chancellor may well struggle to deliver upon his new affordable housing targets as developers begin to face losses.”

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