Sales of residential schemes in central London during the second half of 2015 fell by 22% compared with the same period in H2 2014, according to JLL.
The agent said sale rates continued to fall in the first quarter of 2016, as stamp duty reform and economic and political factors reduced demand, while sales failed to benefit from the surge in buy-to-let acquisitions seen in other parts of the UK.
These factors also affected supply. While 33,500 houses were under construction in H2 2015, a 28% rise on H2 2014, starts had slowed by the second half of the year, and planning applications were down by 30%.
“That’s a clear demonstration of developers adjusting expectations to what has become a softer market and recognising that supply has started to move, at least in some locations, ahead of where aggregate demand could absorb that supply,” said Adam Challis, head of JLL residential research.
Overall, prices rose by just 1.9% in the year to March 2016, masking considerable disparity across the market’s sub-regions: in the outer east prices were up by 7%, while in the central west they were down by 5.3%.
Click here to listen to an interview with Adam Challis and view an interactive map
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