Home prices in the best areas of central London fell by the most since June 2009 in the six months through February as turmoil in financial markets and higher taxes deterred buyers.
The decline in the 15 districts defined as the capital’s prime areas was 0.6 percent, according to London-based broker Knight Frank LLP. In Knightsbridge, home to the Harrods department store, values dropped by 7 percent in the 12 months through February, while there was a 3.3 percent fall in South Kensington and a 2 percent drop in Chelsea.
Sellers of luxury homes in the capital are cutting asking prices on the largest proportion of properties in at least three years as high valuations, commodity-price declines and new stamp-duty taxes reduce demand. Vendors lowered asking prices on 39 percent of homes in central London since they were first offered for sale, according to data compiled by researcher Lonres in January.
“A combination of higher levels of stamp duty and volatility in the financial markets means demand for prime central London property has been subdued in the first two months of 2016,” Tom Bill, head of London residential research at Knight Frank, said in the report published Monday. “In particular, the start of the year has been overshadowed by fears surrounding the impotence of central banks.”
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