JLL has downgraded its forecast for house price growth in central London residential developments from 1% to -3% in 2016.
It said demand for central London residential has weakened, driven by a deepening of global economic uncertainty, notably from China, but more significantly by the imposition of an additional 3% stamp duty charge for second home purchasers and investors.
Revised forecasts:
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Nov-15 | 1 | 3 | 5 | 4 | 3 |
| Mar-16 | -3 | 0 | 4 | 5 | 3 |
This change has resulted in shifting buyer preferences and a diminishing appetite for high-value properties – those priced above £2m – in new-build developments.
Adam Challis, head of residential research at JLL, said: “We are seeing a shift in appetite with purchasers now seeking long-term growth prospects in the medium to lower end of the price spectrum and our expectation is that demand in the sub-£1m market will remain buoyant throughout 2016, albeit with an increasing note of caution.”
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