Investors can snap up prime central London properties at historic discounts equivalent to those seen in the early 1990s, according to new research by Savills.
Values fell by 2.6% in the year to the end of June, largely due to changes introduced in the Autumn budget.
It means that the average property in prime central London now costs 21% less than at its peak in June 2014, a saving of £1.2million on the average property, which is currently worth £4.6million.
Lucian Cook, of Savills, suggested: “The abolition of the non-doms tax regime and imposition of an increased stamp duty surcharge on additional homes sits firmly behind a further easing in prices in central London.
“However, the scale of those price falls has been limited by several factors, including the value already on offer since before the Budget.
“Compared to the pre-downturn peak of the market, prices are in a similar position to those last seen in 2009 and 1992, when values had fallen by 25% and 22%, respectively.”
Savills expects that prices in prime central London will bottom out this year. The strongest parts of the London market have been in Hackney, up 4.9%, and Putney, Wimbledon and Islington - which all at up 3%.
“Domestic buyer demand has been supported by the interest rate cuts that have already occurred, but the prospect of lower debt costs later in the year hasn’t provided a great deal of urgency among prospective buyers,” added Cook.
Outside of London, prime property prices showed no discernible movement in the first quarter of the year.
Savills said prices remain down 1.1% on an annual basis as the market recovery lags the mainstream due to the underlying tax environment.
The Midlands and North were the strongest regional performers, albeit at a modest 0.9% annual growth.
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