“There is unanimity that the capital has every reason to be optimistic in the long term” 

After a year of uncertainty, London’s housing market approaches 2017 on the defensive, right? Well actually, no – analysts and agents alike say the future is better than expected, writes Graham Norwood. No one denies that Brexit, an unexpected US election result, a weak Pound and a series of fiscal measures against the buy-to-let sector has been more than a little challenging. But there is unanimity that the capital has every reason to be optimistic in the long term. Savills, for example, says there are four geographical housing markets for London – the prime central area, prime suburbs, the inner commuter belt out to the edge of the M25, and the so-called ‘outer commute’ of a radius of an hour’s travelling time from the centre.  

The agency – widely regarded as one of the most authoritative market forecasters – says each of these will see house prices rise between 20.4% and 24.5% over the next five years. There’s light at the end of the tunnel for Simon Tolli of United Kingdom Sotheby’s International Realty, too. He says: “An increase in transactions and volume in the last quarter of 2016 has instilled hope that the London market is weathering the storm.” He adds that one part of the capital shines out as an emerging prime market. “Victoria will be one to watch in 2017 with much of the development due to complete. It’s transformed from a transport hub into a place where people want to buy property, live and enjoy” he says, citing impressive retail names like Tom Ford and Jimmy Choo moving in to the area. 

JLL, another property consultancy, says the price reductions for some prime central London properties – agreed by some vendors to offset high stamp duty and Brexit uncertainty – have in most cases washed through the market. “For properties where prices have already been adjusted we do not anticipate any further downgrading. We’re anticipating annual price growth of 0% in 2017, +1% in 2018 and +3% in 2019 before stronger growth and greater normality returns to London generally and the Prime Central London housing market from 2020,” says JLL’s researcher Neil Chegwidden. 

Strutt & Parker is similarly open-minded about the market in 2017 and beyond. “Go back to fundamentals. Compared to the rest of the world, we have benign corporation tax, mid-level property tax, a favourable time zone, we speak in the international business language and have huge depth of markets and skills. As a result, our economy is currently holding up better than perhaps many expected,” explains Stephanie McMahon, head of research at Strutt & Parker.

 So as 2017 arrives there really are reasons to be cheerful about the market, despite the winter weather.

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